Over the last few years the last place to go for financial assistance would have been the bank, especially Portuguese banks! However the tide is turning, and things are getting easier.
For clients looking to purchase their home in the sun, cash has been king since the start of the recession in 2008 as banks were not in a position to lend to overseas clients, and in part this contributed to the fall in prices.
Clients looking to buy a villa for 800,000€ would look to put down around 40% and borrow the rest, with no financing available some of these buyers were still trying to buy an 800,000€ villa for nearer to 400,000€ and in some instances they were successful! Occasions like these then helped drive down the prices by nearly 30% over the last few years.
Thankfully, following this period of downturn, the market is now stabilising and prices have firmed up, although at considerably lower levels than pre-recession. Buyers are back buying and the banks at long last are starting to open their wallets.
In 2012 we did not sell one single property with a mortgage; everything was sold to cash buyers. However we are now seeing clients coming back to the market searching for finance.
To date I have found one bank that is really taking this aspect of the market seriously. BES bank and in particular the BES bank in Praia da Luz have been very proactive, helping a number of clients achieve their dreams in the last 6 months.
BES is offering clients mortgages with the following terms:
Up to 75% loan to value
Between 4.2% - 4.6% spread + Eurobor
Up to 30 year mortgages available
To apply for a mortgage you need the following information:
• Passport / ID Card
• Marriage Regime (declarative)
• Nº Contribuinte (Fiscal Nº) – (Issued in Portugal)
• Proof of address: Utility Bills (i.e. Water, Gas, Electricity) & Council Tax
• Bank Statements (last 3 months)
• Statement of Academic qualifications and School Area (Law, Engineering, Medicine, etc.)
• Statement of Profession/Business/Activity (showing Employer’s & Employee’s details with a valid date from the last 3 months)
• Credit Report = Experian, ICB (Irish Credit Bureau Limited), Schuffa, Betreibungsauszug.
• Copy of the Promissory Contract Detailing the conditions of Sale (“Contrato de Promessa de Compra e Venda”)
If employed:
• Pay slips (Last 3 months) - showing Employer’s & Employee’s details
• P60; Skatteverkett; Bescheid (last/current tax year);
If self-employed:
• Tax Calculation Self-Assessment (last/current year) or an official Letter from Inland Revenue stating proof of earnings
• The previous 3 years certified accounts
• Profession/Business/Activity License or the Registration Certificate from ‘Companies House’
This most certainly isn’t an advertisement for BES bank, it is just that I have had the most professional and supportive help from this bank than any of the others.
If you would like any other information on Financing please contact me for more information on david@bpaproperty.com.
