When you know you want to purchase property in Spain, your first decision will have to be how you are going pay for it; there are numerous options available and all should be considered, and even decided upon, before you even think about starting your property search. There are a number of ways you can do this: through your own savings, the sale or re-mortgage of your UK home, or through loan options.
One of the most common ways of funding a property purchase is through a mortgage – and when buying in Portugal, you have the option of considering a UK re-mortgage, or searching for one with a Portuguese mortgage broker.
If you choose to go with a Portuguese mortgage broker, you will need to remember that lending conditions are stringent in Portugal – especially considering the additional impact that the global economic crisis had on the country; the banking sector there is only now starting to recover from the losses it experienced. As a non-resident purchaser here, you will also find that there are fewer choices available to you.
We recommend speaking to an overseas mortgage broker to determine what offers are available to you – as these will usually change on a daily basis. Make sure that you understand exactly what the requirements are for each offer; currently as a non-Portuguese national you will generally be asked for a deposit of up to 40%, depending on the type of mortgage and your circumstances, and you will also need to consider the documentation you need to produce, interest rates, loan terms, the type of mortgages available and their rates, the criteria that is used to determine how much you can borrow, and any fees and repayment amounts and how you will afford these.
Once you know exactly how you are going to finance your property, it is at this point, before you begin your property search, that we recommend opening an account with a currency exchange specialist like Smart Currency Exchange. Smart Currency exchange offers free, no-obligation accounts, with a number of benefits – including access to your own personal trader who can offer you guidance on currency strategy and all the options available for you. Another great benefit of Smart Currency Exchange is that they can offer you exchange rates that are up to 4% better than those offered by your local bank.