MORTGAGE LOANS - WHAT YOU NEED TO KNOW

A mortgage is a loan for the purchase of a property through a credit agreement between a financial institution registered with the Bank of Portugal and one or more individuals.
When the possibility of buying a house outright is ruled out, a mortgage becomes the real alternative.

In theory, a mortgage serves four purposes:
1. Purchase or renovation of your own home;
2. Purchase of a second home and rental;
3. Purchase of land for building your own home;
4. Other purposes, such as construction work or supplementary credit, where the property is given as collateral for other loans taken out with the same entity.

Today's requirements are actually more demanding, and to successfully access a mortgage, you need to be familiar with the process.

Start by noting down your individual or joint fixed income, depending on your situation, and do not consider variable income resulting from one-off situations, such as sales commissions, commercial and performance bonuses, among others.

Also try to take stock of your various expenses: monthly loans and insurance, credit card payments, telephone, groceries, meals, leisure, health, fuel/transport, clothing, education, etc. (don't forget to include a savings amount for unforeseen expenses). If your total expenses exceed your income, it may be better to reconsider applying for a loan and focus on balancing your accounts.

As the loan you are applying for is for a house, you should also consider the associated expenses, such as taxes, electricity, water, gas, condominium fees, insurance, decoration, appliances, among others.

Another indicator that banks may use to assess whether you are a good payer or not is if you have a negative bank account balance on several occasions, as this may indicate that you are an inconsistent customer and may incur debts beyond your means. As we have seen, this may raise doubts in the institution's mind as to whether you will be able to pay the loan installments on time.

If you have any questions, UrbiSeg Imobiliária. We will be happy to help!
Source: Banco Ctt