BUYING IN PORTUGAL IN 2019 MISTAKES TO AVOID
Are you planning to make your first real estate purchase in Portugal. Whether it's for a primary residence with a view to expatriation plan or simply a real estate investment.
The real estate market has been very strong for several years and continues to grow. Even so, it’s still possible to find a good deal in 2019—as long as you avoid certain mistakes that could turn your first investment into a complete disaster.
Carry out an appraisal of the property you want to buy
When purchasing a property on credit, it is strongly recommended that you have the property you wish to buy in Portugal appraised. This appraisal must be conducted by an independent appraiser.
This appraisal will determine the true value of the house based on its features, amenities, location, and so on.
It is important to know that the bank will finance only 80% of the appraised value; the remainder must come from your own funds.
Carefully Consider Your Financing Options
In Portugal, mortgages can have either a fixed or variable interest rate. Each of these financing options has its advantages and disadvantages. It is essential to take your time when researching and choosing your financing option.
In Portugal, banks will require you to make a down payment of between 20 and 30% of the amount you wish to borrow.
Taking Out a Loan in France: A Good or Bad Idea?
Many of you are applying for a loan in your country of residence. But are you fully aware of the risks?
Taking out a mortgage in France to buy a home in Portugal can involve certain risks. Unlike in Portugal, interest rates in France are fixed and generally quite favorable. However, your bank will require collateral.
A French bank has no legal means of securing a loan against the property you are going to buy in Portugal. The only collateral it can accept must be located in France.
The French bank has two options: the first is to take out a mortgage on your personal property in France; it may also require financial collateral of up to 100% of the loan amount.
This means that if you fail to make your loan payments, the bank may seize the mortgaged property or your financial collateral.
Check the UNs
It is essential to make sure that the property you are about to purchase is free of encumbrances. Unlike in France, the notary does not handle these checks; the notary is solely responsible for registering the sale.
If you do not complete these checks, the UNs will be transferred to the new owner.
Feel free to check out our book, *Becoming a Homeowner in Portugal*, to make your first investment with complete peace of mind.
Be sure to calculate the taxes before committing
In Portugal, taxes and fees must be paid before you go to the notary. On the day you sign the deed of sale, you must provide the notary with proof of payment of the taxes and fees. Without this, the sale cannot proceed.
Living in Portugal Consulting, to create a book that will help you make your first real estate purchase in Portugal on your own, without the help of a real estate agency. The book covers all the relevant topics. You’ll learn about the notary’s role, the various taxes and fees, the different financing options, and more.
