Applying for a mortgage for non-residents: how does it work?

Applying for a mortgage to buy a house always raises a lot of questions, especially if you don´t live in Portugal. If you are an emigrant or a foreigner without a permanent residence permit in our country, you need to take into account various conditions and documents to present when applying for a home loan. And the amount of the mortgage will also be different. We explain how non-residents can apply for a mortgage in Portugal in this guide prepared by idealista/news.

Home loans for Portuguese emigrants

Although it´s perfectly possible to apply for a home loan even if you´re living abroad, the application can be a little more complex, which is why we advise you to contact a credit intermediary with experience in this type of process.

Conditions and documents to submit

If you´re emigrating to another country, you don´t need to have a bank account in Portugal to apply for a mortgage in Portugal and analyse its viability. But you will have to open a bank account before formalising the house loan.

The good news is that you can arrange everything with the bank remotely, a process made much easier by a home loan intermediary.

As for the documents to be presented, they differ little from those requested of Portuguese residents in the country:

• Identification documents;
• Bank statements for the last three or six months;
• Map of credit liabilities from the Bank of Portugal and/or equivalent from the country of tax residence;
• Annual income statement from the country where you work;
• Last three payslips;
• Declaration from your employer (for employees).

It should also be noted that the documentation requested may vary from country to country, but as a rule the above is common to most.

While in most cases of loans granted to Portuguese residents in Portugal the amount financed by the banks is 90% of the value of the property, this percentage drops a little when we talk about emigrants. The financing amount for emigrants is 80 per cent because, as a non-resident, it is a secondary home and this is imposed by the Bank of Portugal.

But bank financing can be even lower for emigrants. "The amount to be financed can drop to 70 per cent if the clients live outside the European Union. In addition to the country factor, there is also the exchange rate factor, i.e. the client´s income is in a currency other than the euro," explains Miguel Cabrita, head of idealista/credithabitação in Portugal.

Hints and tips

To save time and make everything more practical, we suggest that if you are an emigrant and want to buy a house in Portugal with a mortgage, you follow these steps:

• Simulate the home loan;
• Get approval from the bank;
• Search for the property;

As you can see, our first tip is to start by doing several simulations. This will give you an idea of which bank or banks best suit your needs and then you just have to get in touch with them.

And why get bank approval before looking for a house? The explanation is simple: that way you know the maximum value of the property you can look for. It should also be noted that a home loan process for emigrants takes exactly the same amount of time as for residents, between 1 and 2 months.

If you´re a non-resident foreigner and want to buy a house in Portugal, you should know that the process is also possible, albeit with some conditions. But we´ll explain everything you need to know.

Conditions and documents to present

The first condition is that you have a Tax Identification Number (NIF). Then you just need to present the following documents:

• Personal identification document (such as a passport);
• Bank statements for the last three months.
• Last three payslips.
• Last tax return.
• Declaration from your employer (in the case of employees).

Financing amount

Depending on the bank, the loan amount for a property for foreigners not resident in Portugal is between 70% and 80%. Loan terms can be up to 40 years.

Also note the country of residence, because if you are a foreigner and live outside Europe, this can influence the banks´ decision when it comes to granting housing loans.

Hints and tips

Our advice for foreigners not living in Portugal is the same as for Portuguese emigrants. However, you already know that before you go off to get your mortgage approved, you should make sure you have a NIF and all the necessary documents.

Source: Idealista/News