We invited credit intermediary Pedro Leitão to write about his profession and credit intermediation in Portugal.
“The mission of a Credit Intermediary is to find the best credit solution for each client, taking into account the specificities of each process.
The credit intermediation service in Portugal is completely free for the client under the rules of the Bank of Portugal.
In Portugal, around 50 per cent of sales and purchases are financed by banks.
It is possible and relatively simple for foreign clients to obtain a mortgage in Portugal, but the Portuguese banking system makes a big distinction between tax residents in Portugal and non-tax residents in Portugal.
In order for banks to consider a foreign national as a tax resident, at least the last personal income declaration must have been made in Portugal. This personal income declaration is called IRS. In these cases, financing can be up to 90 per cent LTV (lown to value).
For non-tax resident citizens, who declare their personal income in their country of origin or in a country other than Portugal, the financing offered by the vast majority of Portuguese banks is 70% LTV, although in some cases it is possible to reach 80%.
It’s important to note that the LTV to be considered for financing is always calculated on the basis of the lowest value between the amount declared for the purchase and the amount declared for the purchase.
It is possible to finance the purchase of property, self-build (plot + construction), ruins (in some cases) and even agricultural land. There are financing solutions for almost every possibility within the Portuguese banking market.
Banks analyse each client’s risk based on their declared income and, based on this analysis, present their financing offers, which is why it’s important for a client to use the services of a CI in order to be able to choose between different offers the one that seems most interesting to them.
The vast majority of my clients are foreigners and for me the initial conversation/phone call is essential to understand the details associated with each client’s professional and family reality so that I can understand which banks to approach for each specific client.
Each case is different and even the documentation to be presented varies according to the specifics of each process, for example if the client has income from outside the Schengen area, if the client is self-employed, if they need the maximum LTV or if they are only looking to finance a small part of the purchase price, etc….
The vast majority of banks require documentation to be translated into Portuguese, English or French, but there are also banks that don’t need translations and can only approve financing using original documentation in the client’s language.
At the start of the process, I try to clarify all the client’s doubts about interest rates, LTVs, how long the process will take, details and formalities and, above all, I try to create a strategy with the client to approach the process with the banks in a way that meets each client’s needs.
Bank A may be perfect for one client, but not viable for another, it all depends on the details of each process and each client…
The Credit Intermediation service in Portugal is very comfortable and safe for the client, as they have an interlocutor with the bank who has detailed knowledge of the banking offer in the Portuguese market and will accompany the client at every stage of the process until the purchase deed is completed.”
If you have any questions about credit brokerage, you can contact Pedro Leitão directly:
Email: pedroleitao@maxfinance.pt
Mobile: 00351 964 132 167