With the aim of better clarifying what mortgage credit is, as well as the credit intermediation service, I invited Dr. Cristiana Machado to have a conversation with me. One of the focuses of our conversation is on the perception of how bank credit for the purchase of housing works, as well as the value that the mortgage credit intermediation service can bring to all those who invest or intend to invest in residential properties.
Below you can find the content of my conversation with someone who has been working in mortgage credit intermediation for several years, and also has relevant experience in granting mortgage loans from a banking institution, as well as relevant experience in real estate mediation. A true expert who I turn to and listen to often.
Marco Moura Marques (MMM): Cristiana, first of all, thank you very much for agreeing to have this conversation with me. As you know, I have a monthly newsletter and I like to include topics that are of interest to my clients. And one of these themes is, without a doubt, mortgage credit. So I start by asking you: what is this about mortgage credit?
Cristiana Machado (CM): Good morning, Marco, and thank you. Naturally I couldn't help but do this interview with you. Marco has effectively been a consultant with a lot of relevance and a lot of impact on the lives of his clients and when it comes to mortgage credit intermediation, too. I thank you in advance for your recommendation of me and for your trust, above all.
MMM: Thank you.
CM: So, we can say that mortgage credit is, in fact, financing from a bank with the aim of purchasing a residential property and through the application of an interest rate and a term, buyers will then have access to a regular installment that will allow them to pay off the house for “x” years.
MMM: Very well, and making the connection with what you do on a daily basis, I ask: what is mortgage credit intermediation? and to what extent can it add value to my clients?
CM: Mortgage credit intermediation is “know how”; it is knowing how to adapt the main needs of buyers to banks' solutions and sales products. Mortgage credit intermediation is an activity regulated by the Bank of Portugal, and I am certified, so I have to have knowledge of the banks' products and best solutions, including even their special campaigns, under the mortgage credit that each of the banks is offering. I currently work with eight credit institutions (banks) and these will provide solutions for what our clients consider to be essential for buying their next home.
MMM: How do these institutions work? Are they chosen by you?
CM: They are filed by Bank of Portugal and by the credit intermediation activity.
MMM: So, I can deduce that your activity is remunerated by these institutions, right? And not by the clients who will meet with you.
CM: Yes, only by them. Never by our clients. In fact, I will open a parenthesis here, as it is important to pass this information on to clients: at no time can I choose or sign documents for the client. It is always the client who has the say and the final decision.
MMM: In other words, you collect several proposals….
CM: Exactly, and I present them to each of the clients, drawing their attention to the weaknesses and strengths of each of the proposals. But it is always the client who has the final decision, naturally.
MMM: Before we continue with the topic, a parenthesis that has to do with a more personal side: why this activity, Cristiana?
CM: In truth, I have been working in real estate since 2008. After a few years of this experience, I decided to educate and train myself in the promotion of mortgage credit. I wasn't completely happy, as I thought I could do both, combine the best of both worlds: working on the commercial side and having direct contact with clients (which I continue to have), but without losing the knowledge and, therefore, be able to provide them with the best solutions. In fact, what motivates me is making people and families happy.
MMM: Returning to mortgage credit, I ask you: what is the state of the nation? In other words, how do you see the state of mortgage credit in Portugal at the moment, and what are your prospects for the future?
CM: In the last few months, I would even say, in the last year, it is common knowledge that people are somewhat worried, which has brought some caution to the market. In other words, we have become afraid of the word “inflation”, which has become a “bogeyman”. And we are afraid from the moment we understand it better when we buy basic things, like milk, water or bread. Now this makes people focus on making better purchases, which means that this will also happen with mortgage loans. In other words, today we probably have a customer who is better informed, better prepared and more cautious in their purchases and decisions. The granting of mortgage loans may have slowed down, but it certainly has not stopped. It does mean that people are reflecting more than before, before taking that step. I didn't stop closing mortgage loans. Because within mortgage credit there are several nuances, which we will certainly talk about later. My perspective is that we will return to providing more mortgage loans to families. “Traditional” situations will always occur in a family: it is the person who is going to buy their first house because she is getting married, it is the recent widow or widower who is going to sell their house and buy another one because it no longer makes sense to keep an existing over-sized house, it is the couple who divorces and, at least one of them, will need another house... If we remember 2008, a year in which there was a lot of housing supply and little demand, that is, exactly the opposite of what happens today... at that time we did not stop doing a lot of business and financing many families with mortgage loans. And during that period there were also very high interest rates. So there is no reason to be scared, especially because I believe that, soon, we will have more calming news, which will lead to people being able to buy again and have more friendly interest rates on mortgage loans. But, I say, don't wait too long because good deals, in the meantime, slip away...
MMM: I know it will be a bit of futurology... but it seems to you that people will calm down because in the meantime they have gotten used to these high interest rates and are adapting their lives, cutting other expenses to be able to access housing credit or do you preview that these interest rates will go down?
CM: The interest rate will fall. What is expected is that at the beginning of next year it will stagnate and that in a year from now it will start to decline. However, there are several measures that, I believe, are being implemented by the Government, credit institutions and even the companies where people work, in order to improve families' disposable income. These types of developments have already existed. In fact, at the beginning of this year I carried out some mortgage credit operations for some clients who have now contacted me again to tell me “Cristiana, I paid off my mortgage loan and my employer increased me”. That's why I believe there is more good news and measures to combat this fear.
MMM:You are making me more optimistic, because I've actually felt a lot of caution from purchasing clients, not in terms of deciding that they're not going to buy at all, but in the sense that they are expecting that the interest rate could suffer a inversion.
CM: I would also add the following: every day we hear news that may not be the most encouraging. But with the credit institutions that I have been working with, I have asked what impact it has had on people, whether they already feel any type of over-indebtedness, whether they already feel a high need in their families... and I can say that the majority of banks says ‘not yet’. So something is happening.
MMM: That's good to know. Let’s now “dive” into some specificities of mortgage credit. And I would like to start with the theme of access conditions. In general terms, what are the main conditions that must be met by those who plan, want or need to take out housing credit?
CM: As mortgage loans are granted by credit institutions, that is, banks, there are some components that cannot fail to be analyzed. Among them is the individual or the family debt. If someone wants to buy a house while single, the bank has to understand who they are. If he/she have or not a salary, or if at the end of the month he/she doesn't have money in his/her account, how will the bank be able to lend money to that person? This will not be easy to analyze... However, it may be easy to analyze if this person has savings. For example, this person could reach the end of the month without money because he/she puts the money in a savings account... if so, then it will make sense. It will also make sense to understand the amount of equity that someone has to invest in their next business. It will make sense to understand how these people are in their companies or professional entities and what type of employment contract they have. For me, this is what is actually most important for a person to have access to a mortgage loan: understanding whether the person is consistently working with a company. And, soon after, the level of debt. These are the main conditions.
MMM: General conditions for accessing housing credit. For the banks - and even, perhaps, firstly, for you, Cristiana - to be able to analyze and draw conclusions about this debt capacity, they will need documents, right? Specifically, what is being asked by the banks to carry out this analysis?
CM: The citizen card, where we have access to the date of birth. With this, we now know the financing term that the customer can access. It will also be necessary to submit the annual IRS declarations, the latest pay slips, the liability statements with the Bank of Portugal, to understand what type of credits the person has. And finally, the employment contract.
MMM: And in this documentation that is made available to you and, through you, to the banks (in compliance with the GDPR), what should not appear there? I'm not saying that something should be hidden, I'm saying that something can be presented to the banks, but given its content, it could make it impossible to acquire credit...
CM: I'll give you an example: it is advisable that in the first conversation with customers we are as transparent as possible, and that in the “me-customer-bank” triangle we have access to aspects of the customer's financial life. For example, in a situation where the client is paying rent for the house where he lives, but will no longer have this charge soon, it is important that we inform the bank that this rent will no longer exist, otherwise the bank will assume that the mortgage payment is in addition to what he is already paying for the rent. Therefore, there is information that, although it can be shown and shared, must be explained. Let's even imagine that a client has a mortgage loan and that loan is not being paid. Now, before sending any documentation to the bank, it is advisable to analyze and speak to the client and see if there is not even a misunderstanding regarding his debt. The client may not even be aware of this and, then, we will try to “clean up” this and only then present this documentation to the bank. As Marco rightly said, we are not going to hide anything from the banks. We have to prepare a strategy, so that both the bank and the client can be completely comfortable with the analysis that will be carried out.
MMM: In other words, from what you're telling me, it ends up getting a lot into the personal life of each mortgage loan applicant...
CM: Look at this, mortgage credit, like your business, which is the real estate market, is probably the most important business in people's lives.
MMM: Yes, certainly.
CM: So it makes sense that, as I am the intermediary for a couple who are going to request financing from a bank, if this bank is going to lend them money to purchase the house where they are going to live with, possibly, their children, then we will have to have access to this information from a more personal and private sphere of people's lives. It cannot be done any other way.
MMM: I asked you what should not be included in the documentation to be presented to the bank… But what about between the moment the client receives a proposal from a bank and accepts it and the moment of the deed? I imagine there are, in this period of time, situations that could impede the granting of this credit…
CM: Without a doubt. Because, remember, a feasibility, a proposal, a mortgage loan simulation or even a loan approval, before an evaluation or a deed, will not be enough to compromise both the bank and the client. Only in the deed will we have the final contract and only then will we have access to the true conditions of the credit granted to the client. Until then, it remains a proposal. Therefore, in the same way that the customer is not obliged to contract that credit, the bank also does not have to maintain the same conditions. Of course, if at any point between a simulation and the deed something changes, whether in the bank or in the client's own professional or personal life, and if it is necessary to present more documents, this could make the operation unfeasible. Therefore, 100% approved financing will only be available on the day of the deed.
MMM: And situations have happened to you in which, between a pre-approved mortgage loan and the moment of the deed, the client, for some reason, intentional or not…
CM: I already had a situation where the client, twelve hours before the deed, saw his financing canceled, because, in the meantime, he decided and took out a personal loan, which made the mortgage loan unfeasible.
MMM: Terrible! And he did not inform you, he did not inform the bank, and in the meantime, how did this become known?
CM: Because the bank obtained and analyzed the Bank of Portugal's map of responsibilities before the moment of the deed. This does not mean that a person cannot have a mortgage loan and, at the same time, decide to move towards a car loan. The theme here is this: this client's effort rate was almost “strangled” with the mortgage loan and, since he ended up taking out the car loan first, he ended up being completely “strangled” even before he had the mortgage loan. This made the bank rethink its position... and ended up not financing this client.
MMM: Let me ask you something else, even taking into account my experience as a real estate consultant... At the beginning of my professional life in this activity, although I had received these warnings in my initial training, the truth is that I wasn't very aware of all the implications of starting to work with buyer clients without them having a mortgage loan pre-approval. So, I had unpleasant surprises, as I invested my time with them and then, when it came to obtaining mortgage loan proposals, we came to the conclusion that there were insurmountable obstacles. I remember, I had two situations in which, in one, they decisively decided not to proceed with the purchase and, in the other, they decided to substantially postpone the purchase. Now this initial experience means that I work today, strongly recommending to my purchasing clients that they obtain a mortgage loan pre-approval in a timely manner. This way, neither they nor I will be wasting time and the purchasing process will be much more fluid. I ask you: from the moment a client comes to you (directly or through me or other consultants like me) and asks for support in obtaining housing credit, how long can it take to get the first proposals from the banks?
CM: As a general rule, and with access to the documentation I mentioned previously, I can have proposals in between forty-eight to seventy-two hours.
MMM: Generalized for all banks with which you have a protocol?
CM: Yes. And, by the way, I'm going to make an aside here. Marco has already commented that you are surprised when, at some point, a client's mortgage ends up not going ahead, because there was something that prevented it from moving forward. Right now, I can tell you that probably 30% of the people who come to me have no idea about their credit situation and debt responsibilities. And, I can tell you, they have no idea what type of employment contract or employment relationship they have (which for me is even more serious). I even had a recent case in which a client thought she was effective in her employment, as she had already worked at the same company for five years. Meanwhile, she asked the employer for a statement of work and the employer tells her that she is not effective, as the contract ends every year... and they renew it again.
MMM: But the law does not allow more than “x” renewals...
CM: Yes, but when she confronted her boss, he told her that “it was like that, or it wasn’t at all…”. This is to tell you that many people are unaware of their responsibilities. Another example: a client without any financial difficulties, with a good salary, had only taken out a car loan. When she presented me with the map of responsibilities, it showed a overdue debt... of one euro.
MMM: And that alone prevents and delays the entire process…
CM: It was the entity financing the car stand itself that informed the Bank of Portugal instead of informing the client...
MMM: It's terrible, without a doubt. Cristiana, now changing the direction of our conversation a little... what about foreigners or non-resident Portuguese and non-resident foreigners? Are they able to apply for a mortgage loan in Portugal?
CM: They have and, in fact, beneficially. Here they have access to rates that they don't have in their countries.
MMM: In other words, a foreigner who does not reside in Portugal but who, for some reason, decides to buy a property here, can take out a loan from Portuguese banks…
CM: … and with the same conditions offered to the Portuguese. The only difference is the amount of equity to put into the purchase. But in terms of conditions and deadlines, yes, they are the same.
MMM: And in terms of equity, how much are we talking about a difference compared to a Portuguese one?
CM: Eventually around twenty percent.
MMM: In other words, a resident can reach 90% financing and a non-resident foreigner can only have 70%, is that it?
CM: That's right. Portugal is been very fashionable and, during these days, Portugal will be promoted in Times Square, with advertising aimed at Americans, inviting them to come and live in Portugal. Marco, I believe you have some American clients... but do you have any idea of what rate they get on their mortgage loans in the US? Well, it can be around ten percent. Therefore, if I tell them the “bad news” about interest rates in Portugal, that is something that does not affect them much.
MMM: For example: does a foreigner who obtains residency in Portugal benefit from this in terms of mortgage credit?
CM: No. The only beneficial thing will be to eventually have dual nationality.
MMM: Ok. So the fact of having Portuguese citizenship can allow them to reach 90% financing?
CM: Depending on where the income comes from, it is possible.
MMM: What if the income comes from different countries?
CM: If the income comes from Portugal and is in euros, it is possible.
MMM: This counts and will equalize the conditions offered to the Portuguese. What about a Portuguese citizen residing abroad?
CM: 90% financing is still being provided for these people. So, it is possible.
MMM:It is possible, but are there still some conditions that Portuguese banks are raising up? For example, do clients have to pass through or place in their bank account any type of income?
CM: That will always be necessary. Receive their salary in the bank account is always a condition for Portuguese residents in Portugal. Even if it means activating a monthly transfer, on a fixed date, functioning as a monthly salary. This is always a measure requested by banks to grant identical conditions to residents in Portugal.
MMM: In other words, a Portuguese person who lives abroad may be receiving money there, in their bank account, and will only have to transfer it automatically and monthly to an account here. In relation to non-resident foreigners, is there anything else to mention?
CM: The guiding threads are always the same. The guideline remains: income statements, credit reports, type of employment contract...
MMM: I imagine that certain documents required for credit risk analysis by banks, when coming from certain countries, may not correspond exactly to the documents we are used to analyze in Portugal. I am referring, for example, to payslips (although I suppose there is another way to prove how much they receive), declarations of taxes paid on income... I imagine that documents are passing through your hands that are substantially different from those that exist in our country.
CM: Yes, but less and less. I remember two countries where this happens: Angola and the United Arab Emirates. There are no income declarations there, but there are pay slips. In these cases, statements from employers are requested attesting to the income that the employee had in a given year.
MMM: And the document analogous to our Bank of Portugal map of responsibilities?
CM: It exists in every country.
MMM: So there is always insistence, on the banks side, to obtain these documents. I ask: do banks do any type of research to find out if there is any default in Portugal that the client may not be mentioning?
CM: Liability or responsability maps in Portugal are always required by banks, even if clients do not reside in Portugal or are not Portuguese. At the moment, I have some clients residing in Europe who do not have a Portuguese tax number (NIF). Now we are unable to submit a request for approval without a NIF, nor are we able to create a deed without a NIF... This is also why the bank is unable to remove the aforementioned map of responsibilities. In this situation we will have to wait for the NIF to be obtained by the client, before we can proceed with the credit operation.
MMM: Very good. Now changing a little the direction our conversation, to address the issue of the “state of the nation”. As we mentioned earlier, since the beginning of last year, our situation has been characterized by a sudden increase in the reference rate - Euribor - which has caused monthly payments for those with mortgage loans to skyrocket. But we also know that the Portuguese Government has implemented some measures since the middle of last year. How have you seen the applicability of the Government's measures and how does it make sense, whether with the banks or with clients, if these measures have helped in any way?
CM: They have helped. Historically, we Portuguese have always worked a lot with variable rates. In other words, in plain English, we were “badly used to it”, as we were used to low rates, not to say negative ones. I believe that interest rates may improve, that is, they will fall, but they will not reach the levels they once were. But the Portuguese got used to the variable rate. The variable interest rate is the one that results from the sum of the bank's gain (the “spread”) with Euribor, the European Central Bank's reference rate. Now, as this rate was negative until the beginning of last year, naturally we continued to prefer the variable rate, because it was always more “friendly” and that meant for people that they would pay less. One of the major measures that the Government activated with credit institutions was to raise awareness (and force) all banks to adopt and offer fixed rates on mortgage loans.
MMM: Adopting them as an alternative, right? It’s not about moving from a variable rate to a fixed rate…
CM: The effort rate is always calculated on the net income that each individual or household earns. In other words, banks calculate what percentage the possible monthly installment payable for a mortgage loan represents in their client's total net income and only finance up to 35% of that net value. This is how they calculate a future bearable monthly mortgage installment.
MMM: I've heard that there are banks that are financing up to a 50% effort rate, is that true?
CM: Maybe depending on the guarantees and equity that the client can present...
MMM: Ok. But if that happens, wouldn't they be contradicting Bankof Portugal guidelines?
CM: I believe they don't, they can't.
MMM: And resuming the conversation regarding the measures implemented by the Government, in addition to the fixed rate...
CM: In addition to the fixed rate, we have the term. That is, some credit institutions have decided to change the maximum terms again, which is why we are once again hearing about mortgage loans up to 80 years of age.
MMM: Again.. this has happened in the past, right?
CM: Exactly. But this is not for all clients.
MMM: Is it not applicable to clients in a precarious situation due to this sudden increase in the interest rate?
CM: No, we have both situations. In other words, it applies to those who are in a precarious situation, but also to those who are in a very comfortable situation. The bank may even understand that a certain applicant with an 'interesting' salary will be able to take out a loan up to the age of 80, but as long as it does not exceed 30 years of financing.
MMM: Understood... it allows a person aged 50, at most, to take out a mortgage loan and extend it until they are 80.
CM: A lot has been changing in mortgage credit, particularly all the contracts associated with it. We were talking about life insurance, multi-risk insurance, credit cards and the obligation to use them, etc... There were many things to decide when taking out a home loan and, it seems to me, banks are increasingly reducing these associated products, because they effectively want to make better and more economical mortgage loans for their clients. These are some of the measures that can lower the amount the client is paying in monthly installments. In addition, in the Portugal State Budget for 2023 it is foreseen that whoever pays off their mortgage loan during this year will not have to pay the penalty rate for early repayment, if they have a variable rate mortgage loan. In other words, banks are available to exempt their customers from 0.5% of the early repayment value. In fixed rate credit agreements, where the penalty rate is 2%, the bank asks the customer for 1.5%, as it is only authorized to exempt the 0.5%.
MMM: What about home loan transfers? I infer that the 0.5% exemption applies here, as there will be an early amortization... But are greater facilities planned for these credit transfers or were they already, let's say, facilitated?
CM: I believe that the 0.5% penalty exemption may have helped to publicize credit transfers more. Because, in fact, the possibility of transferring mortgage loans between institutions already existed. I have done some. Let us not forget that, when requesting a credit transfer to another bank, that other bank will have to analyze the viability and risk of what it will receive. It will carry out exactly the same analysis that the original creditor bank carried out of this client's financial and risk profile. Credit transfer makes sense for those people who maintain their financial capacity and ability to pay their mortgage installments, but who, by transferring it to another bank, will obtain more and better conditions.
MMM: I also learned, in fact it is public knowledge, that banks issued prevention notifications to their clients, already in compliance with Government measures. In other words, when effort rates exceeded 35%, these customers were notified by the banks and encouraged to propose a renegotiation of their loan conditions. Do you confirm this?
CM: Yes, yes. Unlike what happened many years ago, when there was talk of default on the part of customers, there was immediate talk of handing over the houses to the banks. Now the banks don't want any more houses. Banks want to make families comply and that is why these prevention measures exist. I genuinely believe that the Government and credit institutions are aligned so that people do not feel too ‘squeezed’. However, many of these measures do not show results in the time frame we want, as they take time to be implemented and show results.
MMM: Let me ask you something, which you already mentioned a while ago, which has to do with the variables that influence the value of the mortgage loan installment. You’ve already talked about interest rates, fixed or variable depending on the index, you’ve talked about the “spread” that will be the bank’s gain and…
CM: …and the deadline is fundamental. Any solution found must meet the client's expectations. If your expectation is to pay as little as possible in monthly installments, then a longer term makes sense. If the client's expectation is to pay as little as possible for the entire loan, then the reasoning is reversed, as we already know that 'more years' means 'more interest'. For those clients who can make the extra effort to pay around twenty-five euros more per month, then it will make more sense to reduce the loan term.
MMM: As I said earlier, a good number of foreigners who turn to you to obtain a mortgage loan are not very used to extending that period too much. But what explains this is also the fact that their average income is much higher than that of the Portuguese…
CM: Yes, without a doubt. As a general rule, these foreigners are up to twenty years term.
MMM: We, in Portugal, as a general rule and if possible, we go until forty…
CM: Yes, but as long as you are up to thirty years old. Under these conditions, a loan can be taken out with a term of forty years, that is, until the client is seventy years old. But there have already been changes in relation to this. Bankof Portugal's indications for the future and, perhaps, for the near future... I would say, 2024 or 2025, are that mortgageloans will be extended to a maximum term of thirty years. In fact, there are already some credit institutions that, at the moment, only contract with maximum terms of thirty years.
MMM: And what other variables can we talk about that influence the monthly payments? Just now you mentioned insurance…
CM: Yes. When taking out a mortgage loan, life insurance and multi-risk home insurance are mandatory. But they are not required to be contracted at the bank where the mortgage loan is contracted. The client is free to choose who they want to work with. However, the bank may include in its proposal some type of 'penalty' if the insurance is not taken out with them, that is, its spread may vary depending on where the insurance is contracted. Even so, this spread increase can be perfectly adjusted and accepted, as it may be below the cost of paying insurance to a bank.
MMM: Most banks, I think, always try to include their insurance in their mortgage loan proposals.
CM: Yes, and in fact, there are banks that have their own insurance. But I've already had mortgage loan proposals in which banks are able to match insurance companies' proposals. And with an advantage: if the policies are held by bank insurers, the updating of insurance premiums is automatic. For example: the number of years of the loan, the amount owed... are automatically updated and, consequently, the insurance premium is automatically updated.
MMM: And guarantees?
CM: The best is always money.
MMM: Right, the equity that clients contribute. Can it also involve other types of financial investments that can be held at the bank that, in some way, serve as a guarantee for the operation?
CM: Nowadays it is no longer used much. What is happening now is almost the opposite: banks are asking customers to open a savings account or make an application, but this is not a condition.
MMM: There is one more guarantee: the property itself.
CM: Yes, that is the mortgage guarantee.
MMM: Subject to evaluation and always part of these operations. And guarantors? Do banks continue to ask for your existence in certain situations?
CM: Yes. The guarantor will not be used to increase the amount to be financed, nor will it be used to reduce the value of the installments. Guarantors serve as a safety net for the client. For example, in a situation where the client has an employment contract in which he or she is not permanent, the existence of a guarantor can guarantee that client the opportunity to obtain a mortgage loan.
MMM: And the number of people that apply to a mortgage loan? I'll give you an example: we have a single client who wants to apply to a mortgage loan, who has a gross monthly salary of 4,000 euros, and we have a couple, that is, two people, with a gross monthly salary of 2,000 euros each. The bank gives preferential conditions in which situation?
CM: In fact, in the example you just gave, there is no preference as to whether one or two people pay the installment, as in both situations there may be loss of salary and consequent loss of financial capacity.
MMM: OK, so the analysis is then done from another perspective. Are there any other variables that can influence the provision of a mortgage loan?
CM: There is a variable that can influence the provision and the value of the loan to be granted. It is possible to allocate a mortgage loan to more than two people. A credit can be tripartite, for example. This can allow for a better monthly payment and, sometimes, a higher final credit value.
MMM: Under co-ownership, therefore, whether the three people are related or not?
CM: Yes, it could be a couple and a child, for example. But they can also be people who are not from the same household. For example, partners. It has to make sense and be correctly presented to the bank. Because, for a bank, this means another salary to be guaranteed.
MMM: Regarding the acquisition of land for construction: as far as I know, this is possible to include in mortgage credit…
CM: It is possible together and separately. In other words, it is possible to obtain financing to acquire the land and build the house. And this scenario could be ideal, as financing is more simplified in terms of related expenses. But it is also possible to finance the acquisition of land and, only after some time, move towards a loan for construction. It's possible.
MMM: Very well, Cristiana, we are coming to the end of this conversation. I know there are still more things to cover regarding mortgage loans, but they will be more specific topics. Do you want to leave any more notes or recommendations here?
CM: I think we have already covered several aspects, but I think the most important thing will be understanding what lifestyle people want to have or maintain. As much as we want to say that there is a better rate or a bank that charges less, we must know how to listen to the needs of our customers. I'll give you an example: a client who asks me whether it's better to hire a fixed rate or a variable rate, I can't tell him what's best for him, as a person, at that moment. There are many variables that can influence what is considered “best” at that moment, such as, for example, the objective that the client has for the property, how long they intend to keep it, whether the difference in the cost of early amortization of the financing justifies choosing at the rate that in the short term has the lowest installment…. And like this, there are other situations that are related to the person at that moment. I am not a mortgage credit intermediary to present simulations, I am a mortgage credit intermediary to present solutions, clarify the strengths and weaknesses of each proposed solution, clarify the points that appear in the simulations and, often, even to translate them, in the case of our non-resident customers, since most of our banks do not have simulations in English.
MMM: I would say that Cristiana, more than a mortgage credit intermediary, you are a true consultant when it comes to mortgage credit. Now that we are at the end of our conversation, and as a farewell, I would like to take the opportunity to praise you a little. Nowadays I always recommend your services to my clients, precisely because I know that more than giving them what they ask for, you question them, make them think and advise them. And, often, as you described, they come to you with an idea in their head and you force them to think better and, thus, reach the best conclusions for them.
CM: I would say that this is a very serious matter to make assumptions about.
MMM: It is, as we mentioned previously, the biggest purchase or investment in someone's or a family's life, not only because of the associated value, but because of the importance it has. It is a purchase that impacts the lives of those who make it and, therefore, there is nothing better than our clients being well supported by a good real estate consultant and a good mortgage credit intermediary.
CM: An unbeatable duo!
MMM: I really appreciate the conversation. This one and others we already had. In all of them I always learn something, some additional point of view or perspective. And I hope that whoever reads us can also learn something more and, thus, make the best decisions for their life.
CM: I hope so. And I'm waiting for them here too! And thank you, once again, for the opportunity to have this conversation.
Are you planning to purchase a property and need to finance the acquisition? Do you want to change house and want to know how to do it in terms of a mortgage loan? Do you want a pre-approved mortgage loan? Do you want to renegotiate the conditions of your current mortgage loan?
Don't hesitate to contact me:
Marco Moura Marques
+351 967 035 966
marcomouramarques@kwportugal.pt
Comentários