What is IMT Jovem?

IMT Jovem came into effect in August 2024 following the publication of Decree-Law No. 48-A/2024, of July 25, as part of the government’s program “Tens Futuro em Portugal”. This program includes a set of measures designed to support young people under 35 in purchasing a home. These measures not only include tax benefits but may also, under certain conditions, offer a public guarantee on part of the mortgage loan.

Who can benefit from IMT Jovem?

To benefit from IMT Jovem, you must meet all of the following criteria:

• Be 35 years old or younger at the time of signing the deed;
• Not own any other residential property at the time of signing (nor have owned one in the past three years);
• Not be listed as a dependent for IRS (personal income tax) purposes in the year of the property purchase.

If the property is being purchased by more than one person — for example, if you are married or in a de facto union — both buyers must meet the above requirements. If only one person qualifies, the exemption applies to only half the property’s value.

Which properties qualify for IMT Jovem?

Besides the buyer requirements, the property must also meet all of the following conditions:

• It must be intended as your primary and permanent residence;
• You must keep it as your primary residence for at least six years;
• The purchase price must be below €648,022.

When does the exemption apply fully or partially?

According to Article 17 of the IMT Code, the exemption is:

• Full for properties valued up to €324,058 (4th IMT bracket);
• Partial for properties priced between €324,058 and €648,022 – in this case, you’re exempt from IMT up to €324,058, and an 8% tax applies only to the excess amount.

Note: If the property’s value exceeds €648,022, no exemption applies.

How to apply for IMT Jovem?

As with any property purchase, you must present proof of IMT payment at the deed signing — or, in this case, proof of exemption.

To do this, you’ll need to complete and submit Form 1 (Modelo 1) for IMT through the Portuguese Tax Portal (Portal das Finanças), indicating that you’re applying under the IMT Jovem program.

We recommend following the official IMT Jovem filing guide also available on the Portal das Finanças. If you’re married under a Community of Property regime, there is an additional complementary guide.

Get a simulation with Lead Kash

Use our simulator to find out how much IMT you might need to pay. If you’re under 35 and planning to buy your first home, talk to us.

We’ll help you find the best solution to reach your goal. At Lead Kash, we handle the entire process for you — including comparing offers from different financial institutions. And the best part? This service is completely free of charge.

Run a simulation, talk to us, and let us simplify your life.

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Financial institutions use this information to decide whether to grant you credit, calculating your effort rate and assessing your credit behavior. Therefore, it is important for you to know what your Credit Responsibilities Map contains and how to interpret it.

Where and how to obtain your Credit Responsibilities Map?

You can obtain your Credit Responsibilities Map directly from the Banco de Portugal website:

• Go to the website and read the terms of access to the Credit Responsibilities Center (CRC) and accept them in the corresponding section;
• Select the date for which you want the information (by default, the current month is selected, but you can request information for previous months, up to a maximum of 5 years);
• Click on “Authenticate and obtain map”;
• Authenticate yourself using your Portal das Finanças login credentials and authorize the communication of your name and taxpayer number to Banco de Portugal;
• Return to the previous page and click on “Obtain map”;
• The file will be immediately downloaded in PDF format to your computer. You can then open or save your Credit Responsibilities Map.

Where does the information in the Credit Responsibilities Map come from?

The information in your Credit Responsibilities Map comes from the Credit Responsibilities Center (CRC), a database managed by Banco de Portugal, containing data reported monthly by financial institutions regarding loans exceeding €50 granted to their clients.

What information does it contain?

Your map includes information about all your actual and potential loans:

• Actual loans: Loans that are currently active and being repaid.
• Potential loans: Credit limits on credit cards, guarantees, and loans where you are a guarantor.

What are actual loans?

Actual loans refer to funds that have already been used and are being repaid, such as:

• Mortgage loans
• Personal loans
• Loans for purchasing securities
• Overdrafts on bank accounts
• Discounted bills
• Leasing and factoring transactions
• Amounts used from credit cards

What information is included about actual loans?

For each financial institution, the following details are included:

• Type of loan
• Monthly installment
• Outstanding debt amount
• Loan status (regular or in default)

What are potential loans?

• Potential credit responsibilities refer to amounts available but not yet used, as well as guarantees given as a guarantor or endorser, including:

  • Unused credit card limits
  • Approved but unused credit lines
  • Guarantees provided
  • Guarantor commitments
  • Endorsements (avales)

What information is included about potential loans?

For potential loans, the map shows the maximum available amount.
For example:

• If you have a credit card with a €1,000 limit and a €200 balance, the potential credit amount will be €800.

If you are a guarantor or endorser for a loan, the total loan amount is listed as potential credit responsibility. If the borrower defaults, this debt becomes your actual responsibility, meaning you must repay it.

How to interpret the Credit Responsibilities Map?

There are two sections in the map:

1. Detailed Credit Responsibilities Map (footer labeled “informação detalhada”)
2. Aggregated Credit Responsibilities Map (footer labeled “Quadro Síntese”)

Detailed Credit Responsibilities Map

It organizes your financial responsibilities by credit institution and loan type, displaying key details:

• Type of Responsibility – Are you the borrower, guarantor, or endorser?
• Financial Product – Mortgage, personal loan, car loan, credit card, leasing, etc.
• Negotiation Type – Is it a new loan, renegotiated loan (at your request), or renegotiated due to default?
• Legal Dispute – Indicates if the loan is involved in a legal process.
• Start and End Dates – Loan origination date and end date.
• Number of Borrowers – If the loan has multiple borrowers, only your portion is displayed.
• Total Outstanding Debt – The remaining amount to be repaid, including overdue payments.
• Overdue Amount – The portion of the loan that is past due:
  • Outstanding balance – The overdue payments expected to be settled.
  • Written-off debt – The overdue amount that the bank considers unlikely to recover.
• Potential Amount – The unused portion of your credit limits.
• Installment and Frequency – Your repayment amount and its frequency (e.g., monthly).
• Guarantees – Any guarantees associated with the loan.

Aggregated Credit Responsibilities Map | Summary Table

This section summarizes your credit responsibilities, distinguishing between:

• Loans where you are the borrower.
• Loans where you are the guarantor or endorser.

It provides key figures such as:

• Total outstanding debt
• Overdue debt
• Potential credit limits
• Number of loans with guarantees

Frequently Asked Questions

Who can access your Credit Responsibilities Map?

Only you and any financial institutions to whom you grant access.

Do banks see all your detailed information?

No. Financial institutions only receive aggregated data, meaning they won’t see which banks you owe money to or where you have defaults. However, they will know how many banks you have credit with and how many have reported defaults.

When did I authorize my bank to access my Credit Responsibilities Map?

• When you open a bank account, the bank usually requests authorization to access the CRC.
• If you apply for a loan, the bank will require access to evaluate your financial status.
• If you deny access, your credit application will be automatically rejected.

Can my bank see my loans with other banks?

Yes. Banks report client loans to Banco de Portugal and, in return, receive information about your total financial commitments with other banks.

If I default on a loan, will other banks find out?

Yes. Banks report loan data to Banco de Portugal every month, including defaults. If you default, your name will be listed in the “Banco de Portugal Blacklist” (Lista Negra do Banco de Portugal).

Important: This information remains in the CRC for 5 years. If you have defaulted during this period, it may impact your ability to get new credit or result in higher interest rates.

Will a paid-off loan be removed from my map?

Yes. Once a loan is fully repaid, it disappears from your Credit Responsibilities Map as soon as the bank stops reporting it.

I missed a payment but later paid it off. Will it still be recorded?

Yes. Missed payments are reported to Banco de Portugal and remain in your records for 5 years, even after you settle the debt.

Does renegotiating a loan affect future credit applications?

• If it was a regular renegotiation (e.g., lower interest rates), there is no negative impact.
• If it was due to default, banks may consider it a risk factor, which could affect future credit approvals.

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1. Review your current mortgage terms

First and foremost, it’s important to review all the terms of your mortgage, including the applicable interest rate, its index and spread, the loan term, and any financial products you may have contracted to lower the spread. All this information is crucial for reducing your mortgage payment and can be found in the European Standardized Information Sheet (FINE) that your bank provided when you took out the mortgage. If you don’t know where it is, ask your bank or check if it’s available in your online banking.

2. Make a partial mortgage repayment

Reducing your outstanding mortgage balance is an effective way to lower your monthly payment. If your mortgage has a variable interest rate, you should know that until the end of 2025, you are exempt from paying a fee for partial or full early repayment, which represents an additional saving.

However, to make an early repayment, you need to have some money available, which can be a challenge. Don’t be discouraged—if you have savings, do the math. Avoid using the amount set aside for your emergency fund (equivalent to 4–6 months of monthly expenses), but check the interest rate you are earning on any excess savings and compare it with the interest rate on your mortgage. The latter is likely higher, meaning you are losing money. In this case, it makes financial sense to use your savings to reduce your monthly mortgage payment.

3. Reach out to your bank to review your mortgage conditions

If you’re unable to make an early repayment, there are two ways to reduce your mortgage payment through your bank: extending the loan term or renegotiating the spread. Check if your bank is open to these options, and remember that you have a negotiation advantage—you are their client, and they don’t want to lose you to a competitor.

Extending the loan term

Negotiating a longer loan term can lower your monthly payment. However, be aware that, according to the rules of the Bank of Portugal, the loan term cannot extend beyond your 70th birthday (or even less, depending on your profile).

Renegotiating spread 

If your mortgage has a variable interest rate, consider renegotiating the spread by subscribing to other financial products from the bank. However, carefully calculate whether the reduction in the spread outweighs the cost of these additional products.

4. Request offers from other financial institutions

Another alternative is to request offers from other banks. Don’t be surprised if they offer you a better deal than your current bank. Since mortgages are one of the most important financial products for banks, they are highly motivated to attract new customers. Many banks even offer special campaigns for mortgage transfers.

Compare the new offers with your current conditions. If you have a fixed-rate mortgage, check whether the new bank will cover the early repayment fee.

If you don’t want to switch banks, use these offers as leverage to negotiate better terms with your current bank.

Get in touch with Lead Kash

If you want to reduce your monthly mortgage payment, get in touch with us. Lead Kash handles the entire process for you and presents the best solution to achieve your goal. Best of all—this service is completely free for you. Contact us and let us simplify your life!

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Effort Rate and Stress Test: Different Concepts

Yes, they are different. Financial institutions use both to assess whether or not to approve your loan application. This is because both measures relate to your ability to meet financial commitments.

Effort Rate: What Is It and Why Do Banks Use It?

The effort rate represents the portion of your net income allocated to your financial obligations, expressed as a percentage. In other words, it is the ratio between your total monthly financial commitments and your net salary.

To calculate yours, sum up your monthly payments for existing loans (including credit card payments), add the expected monthly mortgage payment (if you don’t know it yet, you can simulate it here), and divide by your monthly net income. The ideal maximum effort rate is 35%, but some financial institutions may set different limits.

Banks use the effort rate to determine whether you have the financial capacity to repay the loan you applied for. This is because they assume that, in case of financial difficulties, you may stop paying your loans to cover other essential monthly expenses, such as food.

Stress Test: What Is It and Why Do Banks Use It?

The stress test consists of applying a percentage increase to the interest rate in effect at the time of the loan application and recalculating your effort rate. The purpose is to ensure that, even if interest rates rise, you will still be able to afford your loan payments.

For example, if your effort rate at the time of the mortgage application is 35%, but after applying the stress test, it rises to 50%, your loan request is likely to be declined.

What Data Do Banks Use for These Calculations?

Banks calculate your effort rate based on your declared monthly income and existing financial obligations. To obtain this information, they consult the Central Credit Register of the Bank of Portugal, specifically your Credit Responsibility Map, which you must authorize them to access when applying for a loan. You may refuse this authorization, but in that case, the bank will not proceed with your credit application.

Additionally, as required by the Bank of Portugal, banks must apply the stress test before making a final decision on whether to approve or deny your loan.

The Stress Test Rate Is Set by the Bank of Portugal

With the introduction of Instruction No. 23/2023 by the Bank of Portugal, the stress test rate for variable or mixed-rate loans has been adjusted as follows:

• 0.5% for loan terms of 5 years or less (previously 1%)
• 1% for loan terms of more than 5 years and up to 10 years (previously 2%)
• 1.5% for loan terms exceeding 10 years (previously 3%)

This reduction in the stress test rate makes loan approval easier, as it lowers your adjusted effort rate. However, it also means that you must exercise greater control over your finances.

Get in touch with Lead Kash

Now that you understand the differences between the effort rate and the stress test, it’s essential to evaluate how they apply to your financial situation. If you need guidance on the best way to manage this, Lead Kash is here to help.

Contact us, and we will assist you in finding the most suitable financial solution for your needs—with total transparency and no additional costs. Let us simplify your financial life so you can achieve your goals with confidence.

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Advantages of Increasing Your Mortgage Loan to Pay Off Other Debts

Lower Interest Rate

This is undoubtedly an advantage. The interest rate on your financial loans is higher than the interest rate on your mortgage.

If you were thinking about taking out a personal loan to consolidate all your other debts, don’t do it. Check the maximum credit rate set by the Bank of Portugal for new consumer loans and compare it with your mortgage interest rate. It is certainly much higher.

Lower Monthly Payment Compared to Your Current Installments

By increasing your mortgage loan, your monthly payment will rise (since the total amount owed will be higher), but it will certainly be lower than the sum of your current mortgage installment and your personal loan installments.

Lower Effort Rate

By reducing the financial burden on your monthly income, you gain financial flexibility and lower your effort rate. This is the first step toward achieving financial well-being.

To Increase Your Mortgage Loan, Your Debt Must Be Below Your LTV

To be able to increase your mortgage loan, certain conditions must be met. You need to consider three key values: your current mortgage debt, your total financial debts, and the valuation of your home.

Check the Amount of Your Current Debt 

Your financial plan, included in the European Standardized Information Sheet (FINE) provided by the bank when you took out your mortgage, includes the outstanding principal balance on the date of each payment. Review this document to find out how much you still owe. Alternatively, check your monthly bank statement or ask your bank directly.

Calculate the Total Amount of Your Current Financial Debts

Add up the outstanding balances of all your financial loans, including credit card debt if you don’t pay off the full balance each month. If you don’t know the exact amounts, ask the financial institutions that issued the loans. Also, check whether you will incur penalties for early repayment, such as prepayment fees. If so, include these fees in your total debt calculation.

Determine the Appraised Value of Your Property

This is a crucial factor, as your mortgage should not exceed the loan-to-value (LTV) ratio set by the Bank of Portugal.

If you have had your mortgage for a long time, your outstanding debt has likely decreased, and your property’s valuation may be outdated due to rising real estate prices in recent years. Consider requesting a new appraisal from your bank, but keep in mind that you will have to cover the cost.

Do the Math

With these values in hand, the next step is to calculate your financial position.

Determine the maximum mortgage loan amount you could have based on the LTV set by your financial institution and compare it to your current outstanding debt.

If the difference is equal to or greater than your total personal debts, consider talking to your bank about using this margin to pay off your financial loans. This will give your household budget some breathing room.

Get in touch with Lead Kash

If you want to find out whether you can pay off your financial debts by increasing your mortgage loan, talk to us. Lead Kash handles the entire process for you and, in the end, presents you with the best solution to achieve your goal. Best of all, this service is completely free for you. Contact us and let us simplify your life.

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Why are insurance policies mandatory when taking out a mortgage?

The bank lending you the money to buy your home wants to ensure two things:

1. That it will recover the loan amount if something happens to you.
2. That the property does not lose value while you still owe money.

If you default on the loan and the bank needs to foreclose, it must be able to sell the property and recover the loan amount.

This is why banks require two different types of insurance: Life Insurance and Property Insurance.

Life Insurance

Life Insurance associated with the mortgage has the bank as the beneficiary, and the insured capital corresponds to the loan amount. This means that if something happens to you, the bank will activate the insurance policy, and the insurer will reimburse the outstanding loan balance.

Since the bank receives the full remaining debt amount, your heirs will inherit the property free of any financial obligations, meaning they will not be burdened with debt.

Property Insurance

For those who do not take out a mortgage, Property Insurance is not mandatory. In fact, in terms of real estate, the only legally required insurance is fire insurance for condominium properties.

However, fire is just one of many potential incidents that could affect a property, with floods being one of the most common. If such an event occurs, the damage to the property can be significant, potentially reducing its value if repairs are not carried out.

Therefore, Property Insurance ensures that the property does not lose value in the event of an accident such as a fire or flood. Since this insurance covers repair costs, the value of your home is preserved. This means that if the bank forecloses on your property due to non-payment, it can still recover the loan amount by selling the home.

It is important to note that, in the case of Property Insurance, the insured capital is not linked to the mortgage amount but rather to the market reconstruction cost of the property. This is the value used by the insurance company to calculate compensation in case of damages.

You do not have to purchase Property Insurance from the bank providing the mortgage

Indeed, you do not. The financial institution granting your mortgage may have an interest in selling you insurance through them—since banks often have affiliated insurance companies and earn commissions—but they cannot require you to purchase insurance from them.

To make their offer more attractive, they may reduce the mortgage interest rate (spread) if you bundle the insurance with your loan. The cost of the insurance they offer will be detailed in the European Standardised Information Sheet (FINE) provided to you.

However, you are free to purchase your insurance from any provider offering better conditions. You simply need to ensure that the insurance policies meet the bank’s required terms. Therefore, it is advisable to request insurance quotes from different providers under the same conditions set by the bank.

Then, compare the total cost, including both the monthly mortgage payment and insurance premiums, and choose the most cost-effective option.

Get in touch with Lead Kash

If you need a mortgage, talk to us. Lead Kash takes care of the entire process for you, comparing offers from different institutions and, in the end, presenting you with the best solution to achieve your goal. And the best part? This service is completely free for you. Get a simulation, talk to us, and let us simplify your life!

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But let’s break it down.

What is LTV?

LTV is the ratio, expressed as a percentage, of the amount the bank will lend you to buy your house, and the value of the property. It is calculated using the following formula:

loan amount / property value x 100

In other words, LTV depends on two factors:

• The amount you need to borrow from the bank, which depends on the money you have available for the down payment on the house.
• The value of the house.

What value of the property is used in the formula?

Although the Property Registration Book shows the value assigned by the Tax Authorities (used to calculate the IMI – Municipal Property Tax), this is not the relevant value for LTV.

In fact, for the LTV calculation, only the purchase price (which will appear in the deed) and the bank’s appraisal value are important. The lower of the two values is considered. This is because, since the bank will use the property as collateral for the loan, it wants to ensure that, in case of default, it can recover the money it lent.

Thus, the actual formula for LTV would be:

LTV (%) = loan amount / collateral value associated with the property x 100

The maximum LTV value is currently set by the Bank of Portugal

To prevent situations like those that occurred in 2008 and to protect families, the Bank of Portugal set maximum limits for LTV and loan terms.

In fact, the maximum loan term depends on the borrower’s age, and the LTV has the following maximum limits:

• 90% for home loans intended for the purchase or construction of a primary residence.
• 85% for home loans and loans with a mortgage or equivalent guarantee for other purposes.

LTV can be 100% for bank-owned properties

The Bank of Portugal makes an exception for the maximum LTV value for properties the bank owns for sale, where the LTV can be up to 100%.

Note that properties in the bank’s portfolio are properties whose mortgages were executed by the bank due to default on the corresponding home loan. To recover the debt, the properties are put up for sale, providing the bank with benefits when acquiring them.

LTV can be 100% for the first home purchase by young people up to 35 years old

Here is another case where the LTV can be 100%. If you are under 35, your loan can be 100% of the house value if you meet certain requirements. In fact, when purchasing your first home through the “Tens Futuro em Portugal” program, you can benefit from a public guarantee of up to 15% of the home loan value and secure 100% financing for the house.

LTV determines the down payment and the spread the bank charges you

If the LTV of your loan is 90%, this means that, as a homebuyer, you must pay 10% of the house value with your own funds. In other words, this is an amount you need to have available.

On the other hand, the higher the amount the bank is lending you in relation to the property value, the higher the risk the bank is assuming in lending you the money. As a result, the higher the spread the bank will charge you. The reverse is also true. With a lower LTV, you may be able to negotiate a lower spread for your mortgage.

Get in touch with Lead Kash

If you need a mortgage, talk to us. Lead Kash handles the entire process for you, compares offers from different institutions, and ultimately presents you with the best solution to achieve your goal. And the best part: this service is completely free for you. Make a simulation, contact us, and let us simplify your life.

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If you’re unsure which documents you need, we’re here to help.

The property documents you need to have

The property documents will generally need to be provided by the seller or the real estate agency handling the sale. These include:

Land Registry Certificate

This document certifies that the property belongs to the seller. It contains the entire history of the property, including any existing registrations. Since it is valid for only six months, make sure it is up to date. If it is not, ask the seller to obtain a new one from the Land Registry Office or through the Predial Online platform.

Property Tax Booklet (Caderneta Predial)

This is another document you need to provide when applying for a mortgage loan. It contains the description and location of the property, its taxable value, and the identification of the owner (which must match the information in the Land Registry Certificate). It is used as the basis for calculating the Municipal Property Tax. The seller can obtain it for free on the Tax Authority Portal.

Energy Certificate

This document became mandatory in 2013. It is issued by authorized technicians from the Energy Agency (ADENE) and evaluates the energy efficiency of the property on a scale from A+ (very efficient) to F (inefficient). It contains information that you should review carefully, as it not only identifies the causes of a lower energy rating but also suggests alternative solutions for improvement and their respective costs. Additionally, it shows the potential impact on the rating if the recommended improvements are made.

Condominium Fee Statement

The condominium fee statement became mandatory as of April 2022 if you are buying a second-hand property. It provides details about the condominium fees as well as any outstanding debts of the property owner. You can waive this requirement if you choose, with the waiver being recorded in the deed. However, if you do so, any outstanding debts of the seller will become your responsibility.

Usage License

This document is no longer required for submission according to Article 1, section y) of Decree-Law No. 10/2024 of January 8th. However, if the seller does not provide it, our advice is to obtain it from the local City Hall if the property was built after 1951. It identifies the type of use permitted for a particular building or unit (residential or non-residential), helping you avoid future issues. Please note that financial institutions still request this document, as it is required for the property appraisal.

Housing Technical Data Sheet

This is only mandatory for properties built after 2004, but it has also been exempted from presentation by Article 1, section y) of Decree-Law No. 10/2024 of January 8th. It contains information related to the architectural project of the property as well as its technical characteristics. It also includes any alterations made to the property’s construction. You can obtain it from the City Hall in the area where the property is located. Financial institutions also request this document, as it is essential for conducting a proper property appraisal.

Documents Required for Property Appraisal

To conduct the property appraisal, the financial institution will need the Land Registry Certificate, the updated Property Tax Booklet, the property floor plans, the Technical Data Sheet (if available), as well as the Usage License.

Your Required Documents

In addition to the identification documents of the mortgage applicant, financial institutions generally require the following:

• Last three payslips
• IRS declaration from the previous year
• Proof of employment contract (if applicable)

Get in touch with Lead Kash

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But what document are we talking about? What does it contain, and why is it important not to waive it? Let us explain.

The Declaration of Condominium Charges Has Existed Since 2022

With the enactment of Law 8/2022, the declaration of condominium charges became a mandatory document for the sale or donation of individual units.

Its issuance is now the responsibility of the condominium administrator and includes not only details of the charges related to the condominium but also whether there are any outstanding debts to the condominium by the current owner. If debts exist, the declaration specifies the details.

Is It Mandatory for Selling or Donating an Individual Unit?

Aimed at ensuring that the buyer of the unit fully understands the costs they will incur with the condominium, this declaration provides:

• The monthly charges for the condominium, including regular fees or contributions to the reserve fund
• The amount of any special fees for maintenance work or other expenses approved during condominium meetings
• The payment schedule for all charges
• Whether the current owner has any outstanding debts to the condominium, as well as the nature, amount, and due date of the unpaid charges.

The Seller Must Request This Declaration

The property seller must request the issuance of this document from the condominium administrator, who has ten days to provide it.

The seller then needs to deliver the declaration to the buyer or the real estate agency managing the sale, so it can be presented during the signing of the deed (or donation) alongside other mandatory documents.

Debts Incurred Before the Sale Are Not the Buyer’s Responsibility

According to Article 1424-A of the Civil Code (amended by Law 8/2022), the responsibility for paying existing debts is determined by the due date of the charges.

In other words, the payment of condominium fees or other expenses, such as repairs to common areas, must be detailed in the written declaration issued by the condominium administrator. If the payment dates precede the transaction date, the debt belongs to the property seller. Amounts due after the transaction date are the buyer’s responsibility.

This is particularly important for amounts approved at condominium meetings where payment dates fall after the transaction date. In such cases, since the buyer is responsible, they have the right to know these costs before finalizing the deal.

Waiving the Declaration Means Assuming Pre-existing Debts

This is a crucial point for homebuyers.

For the sale (or donation) transaction to proceed, whether through a public deed or an authenticated private document, the presentation of the declaration of condominium charges is mandatory. However, if at the time of signing, the buyer expressly declares that they waive this requirement, the document is not necessary.

By waiving the declaration, the buyer not only facilitates the transaction but also implicitly accepts any outstanding condominium debts that would otherwise be the seller’s responsibility. This means the buyer must pay those debts. Therefore, be cautious if you decide to waive this declaration.

Get in touch with Lead Kash

Do you need help with the mortgage process for purchasing your home? Request a simulation, contact us, and let us simplify your life.

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How do banks acquire properties for their portfolio?

The properties held in banks’ portfolios result from defaults on home loans previously granted.

When a bank provides a mortgage loan, it places a lien on the property as collateral for the loan amount. If the borrower defaults and no agreement is reached during debt renegotiation, the bank enforces the lien, taking ownership of the property for the amount of the outstanding debt, which is then considered settled.

Banks put properties up for sale

Since banks are in the business of money, not real estate, they aim to sell these properties as quickly as possible to recover the loaned funds. To ensure a speedy sale, banks offer certain incentives to buyers, one of which is 100% financing for the property.

100% Loan-to-Value Financing

When granting a mortgage loan for primary residences, the Bank of Portugal caps financing at 90% of the property’s value. However, this limit does not apply to properties in the banks’ portfolios.

In fact, when the property belongs to the bank, the Bank of Portugal allows 100% financing as a means to facilitate the sale. This means that if you want to purchase one of these properties, you won’t need to make an initial down payment, as the loan can cover the full value of the property.

Other Advantages

In addition to 100% financing, banks offer further benefits to attract buyers:

No Property Appraisal Costs

Since the property is already owned by the bank, the appraisal is already done, meaning you won’t need to pay for it. This is an additional saving compared to purchasing other properties.

Properties May Be Priced Below Market Value

Because the bank acquires the property for the outstanding debt amount and is eager to sell it quickly to recoup its funds, these properties are often listed below market value. This could be an excellent opportunity for you to secure a great deal.

Lower Spreads

Another incentive banks may offer is reduced spreads, allowing you to pay less on the loan over time, which makes the purchase even more attractive.

Bank-Owned Property Listings Are Public

You can find these properties listed through various channels, including:

• Banks’ official websites
• Real estate agencies’ websites
• Real estate platforms
• Branches of financial institutions

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