Application process Portugal
Application process
There is only one chance to make a first impression at a bank: as far as we are concerned, it should be overwhelmingly good. After choosing a particular route toward realizing the desired mortgage loan (see also “preparation”), the application process begins. Five stages can be distinguished in the application process: 1. preliminary application 2. file, 3. submit, 4. monitoring and adjusting, 5. conclusion.
To verify that an application is indeed feasible – in principle – a preliminary application is often first submitted to the intended Portuguese bank.
A well-documented application is essential for a successful application. Unclear or gaps in documentation create the perception of additional risk on the part of the bank. Together, the documentation is completed to the point where all essential elements are substantiated.
Hypotheek & Buitenland creates a comprehensive cover letter explaining all the elements and translating them so that everything is 100% clear to the Portuguese bank. The application is completed with the bank’s application form after which it is submitted.
Once submitted, additional questions or requests for additional documents sometimes follow. Ambiguities are clarified and additional substantiation in the form of documents is provided. Where necessary, if the situation calls for it, the application will be adjusted. If an application is unexpectedly rejected then an attempt will be made to change the bank’s mind by convincing the bank they are wrong. Should that fail, consultation and, if possible, application for a mortgage with another Portuguese bank will follow.
Once the bank’s credit committee has given an in-principle approval on the mortgage application, the appraisal will be launched. It varies from bank to bank who initiates this and who directs the appraiser. The cost of the appraisal is for the mortgage applicant and is €250 to €500.
When the risk committee of the respective bank has given its approval and also the appraisal shows a sufficient value, the bank will give its final approval and send the credit offer and all legally required documentation. These documents contain all the details of the mortgage being offered (the loan offer) and also list the risks, warnings and obligations associated with the mortgage (standard information document). After observing the legally required 10-day reflection period (effectively 11 days), the loan offer can be accepted and the mortgage can be formalized and the purchase completed at the notary. If desired, a bank account in Portugal will be opened and insurance arranged with the assistance of Mortgage & Abroad.
The processing time for a mortgage application in Portugal varies greatly from bank to bank. Counting from the time the fully documented mortgage application is submitted, with some banks you will know where you stand after 2 to 3 weeks. With other banks, it takes as much as 2 to 2.5 months before there is a full agreement. Longer are the processing times for more complex mortgage applications such as when buying out a (former) partner, refinancing or financing new construction.
Some banks that do not have an employee internally who is familiar with the Dutch language ask for (sworn) translations of some documents, such as pay slips, tax assessments or other documents. The goal is always to minimize the translations required.
