What do I need to do a home loan simulation?

If you are looking to advance with a home loan simulation, contact the credit intermediaries Poupança no Minuto. The agents will help you with all your doubts, paperwork, and bureaucracy. But to know in advance what you need for the simulation, keep reading the article.

So, to perform a home loan simulation, you need to share the following information:  

• Property purpose

One of the pieces of information you must provide to proceed with an online housing credit simulation is the purpose you will give to the property you want to acquire.

This is because there are three different purposes and, depending on the purpose, the mortgage credit can have different conditions.

A property can be intended for permanent own housing, secondary own housing, or housing for investment.  

Permanent own housing implies that the owners and their household live permanently in the property, residing for a long period of time. It should be intended to be the official residence of the credit holders.

A secondary own housing means that owners use the property occasionally, except for rental. Typically, it is used as a vacation home.

And an investment property is acquired as a way to put on the rental market, whether long term, short term, or local accommodation. It serves as an extra source of income, although credit conditions may be less advantageous than in the case of a primary residence.

• Available range of values.

Afterwards, you need to indicate the range of values available to offer for the property, indicating the minimum ceiling and the maximum ceiling.

In this field, consider that banks only lend up to 90% of the property value for permanent own housing, and 80% for secondary own housing.

For example, if the property value is 150 thousand euros, for permanent own housing, the bank will only lend 135 thousand euros, having to give in advance 15 thousand euros.

Therefore, evaluate the value you have available in own capital to determine the maximum value that the property to be purchased can have.

• Headlines: ages, income, and expenses.  

You also need to indicate how many borrowers will be the holders of the credit, as it will make a difference in the evaluation of financial capacity. The more holders the credit has, the more income there is to meet the monthly installments. The risk of default is lower, so will the effort rate be.  

You must still refer to the ages of the holders for contract term analysis. Since limits have been imposed on contract terms based on ages by the Bank of Portugal, it is important to know how far it is possible to stretch the credit maturity.

Note that when there is more than one holder, the age that counts for the purpose of the maximum term limit is that of the oldest holder.

And it still needs to have approximate information on the average net income of the proposed holders, current monthly costs with other loans, as well as regular monthly expenses.

• Contract deadline desired

Finally, you must indicate which term of credit you intend to contract. The longer the term, the lower the monthly installment to be paid, but the more interest you will pay.

But pay attention to the limits imposed on credit terms: if you are up to 30 years old, you can contract for a maximum term of 40 years, between 30 and 35 years old, a maximum term of 37 years, and over 35 years old, a maximum term of 35 years.

Age | Maximum term
Up to 30 years | 40 years
Between 30 and 35 years | 37 years
Over 35 years | 35 years

If you are considering getting a mortgage and a simulation shows it is viable to proceed, you can always turn to the services of a credit intermediary. The agents at Poupança no Minuto offer free mediation, handling all the paperwork with the banks and answering all your questions.