Portuguese mortgage process step-by-step guide

How the Portuguese Mortgage Process Works

If you are planning to buy a property in the Algarve you will be wanting to know the process of doing so. It does differ slightly from the UK and other countries but is basically along the same lines.

Get Organised as Soon as Possible

We strongly suggest you start the process as soon as possible, even before you have found your ideal Algarve property. Step one is the most important as this will allow you the luxury of knowing exactly how much the lenders are willing to lend you and how much you will need in cash to process your mortgage application.

This can avoid disappointment at a later date, finding your dream home and then having your application turned down for one reason or another can be a real downer. Once you have the initial offer from the lender you can start looking for Algarve properties within your price range and knowing you can afford the repayments.  

How Long Will the Process Take?

We should indicate that buying a property with a mortgage in the Algarve can be a slow process to complete. From start to finish it can take up to six months so you should build your plans for moving around this period. 

Generally, once the contracts have been signed it will take around 60-90 days to complete. However, the paperwork and documents to get to this stage are the part that takes time.

Step-by-Step Mortgage Process in Portugal

1. Initial Assessment with Lender

Your initial pre-application meeting with the lender at which time you can go through your requirements and situation with a view to applying for a mortgage. You can do this before finding a property to save time and disappointment at a later date. The lender will be able to assess your application from the basic details and make a preliminary offer if everything appears to be in order.

2. Submit Your Application Form and Necessary Documents

After receiving a formal quote the next step is to complete the relevant lender application form and submit it along with all the necessary supporting documents (see below).

3. Receive a Formal Offer

If the mortgage is approved and all documentation has been submitted, you will receive a formal offer. Your lender will confirm the conditions of the offer and assist you with the proceedings.

4. The Valuation of the Property

Once you have received your formal mortgage offer the lender will instruct a valuation of the property you are buying. If the valuation is equal to or greater than the agreed purchase price and there are no legal issues relating to the property, the date and details regarding the completion of the property purchase will be confirmed. If the property valuation falls short of the asking price you may need to cover the shortfall.

5. Arrangement of the Completion of the Sale

The funds for the property purchase including the deposit must be made available and transferred to the appropriate account nominated by the lender before the completion date. Once you have shown proof that the funds are available, the lender will proceed with the mortgage application and a completion date will be set.

6. The Completion of the Sale

The Portuguese mortgage lender will arrange the transfer of the money. Once the property and mortgage deeds are signed in front of the Portuguese Notary and all the associated fees and taxes involved with the purchase have been paid you then become the official new owner of the property.

Important Information to Note

It is very important that you provide all of your most up-to-date documents at once to avoid delaying the mortgage process. You can take these along when shopping around to find the ideal lender for your situation as they check and let you know if anything is missing or out of date. 

You will of course need to take these with you again when you officially fill in the application. But it’s always good to know everything is in order beforehand to avoid delays. Waiting for a missing document to arrive from the UK can take a while so try to have everything on hand before you begin the process.

To Conclude the Process Advice

It is advisable to talk to a specialist in the process of financing and buying a property in Portugal. It can seem daunting, especially if you do not speak Portuguese, which is why we advise talking to a specialist. 

Our team at Gatehouse International Algarve are here to help guide you seamlessly through the buying process and the purchase of your dream Algarve property. Please feel free to get in touch to find out how we can help.