Source: Freepik Author: Redaction The International Monetary Fund (IMF) has come to the conclusion that Portugal is the country where the costs of housing loans have risen the most after the monetary policy implemented by the European Central Bank (ECB), which has resulted in higher master interest rates . This increase has increased the debt service burden in Portugal, which is equivalent to 1.2% of GDP. According to the World Economic Outlook, released this Monday by FIM, it is possible to conclude that the annual increase in debt service costs, compared to mid-2022, varies significantly across the euro area, from Portugal, with 1.2% of GDP to Malta with almost zero . Thus, Portugal is the first in the ranking of European countries with the highest impacts on costs after the ECB’s monetary policy entered into force in July 2022. Second are Finland, with 1.1% of GDP, and Estonia, with 1%. As explained by the IMF, there are market characteristics that contribute to the changes in the transmission of monetary policy effects, namely the prevalence of variable rate loans and the proportion of households with mortgages , and Portugal is effectively one of the European countries with the highest number of housing loans at the variable rate, being vulnerable to any kind of changes in interest rates. Still, the IMF believes that the impact of monetary policy on countries such as Portugal, Hungary, Ireland and the United States seems to have weakened, as there has been a reversal of some trends, such as greater adoption of fixed rate credits, tighter limits of the ratio between the amount of the loan and the value of the asset (real estate), lower indebtedness, emigration from densely populated areas and deflation of housing prices in some areas previously overvalued . Stay to read Differences between a fiador and a avalista: understand them , Households in the Eurozone are saving more compared to 2022 and Banks anticipate resumption of demand for housing credit
Source: Freepik Author: Redaction A avalista is different from a fiador , although they can be confused by having a similar role . However, if there is a difference between guarantee and bail, the two nomenclatures take separate functions, representing two types of guarantee when granting a claim. Find out the differences so, if you are asked to be the avalista or fiador in a credit claim situation, know exactly what to do, knowing obligations, duties and everything that involves these two concepts. Fiador: what is it, what are your obligations and what risks are you taking? Fiador is probably the term you are most familiar with, and you may even know someone who is, or was, someone else’s guarantor in a lending situation. A fiador is nothing less than the person to whom the obligation to settle unpaid amounts falls if the person who took the credit, that is, the debtor, does not pay it. So, imagine: you have a family member who asked for credit to buy a house, and asks you to be your guarantor. By assuming this role, if your family member fails to pay the installments of the credit, you are responsible and responsible for ensuring these missing payments. We give the example of a family member, because in these situations, the most common is that the guarantors are the direct relatives of the credit borrower, such as parents, siblings or uncles. Thus, the greatest risk a fiador runs is even if the person of which he becomes a guarantor ceases to pay his obligations to the bank, which, in a more complicated situation, may involve the enforcement of his personal property by the creditor , as it assumes responsibility on behalf of the debtor. To mitigate these risks, the fiador can obtain the benefit of the prior exclusion, which allows him not to have to pay the debt until the credit holder’s assets are executed. And know that, when you become a fiador of someone, you will hardly stop being one if you change your mind in the future . A bail only ends after the full settlement of the debt or through an agreement with the creditor , however, and because it is a guarantee on debt compliance, this type of negotiations are difficult. Avalista: differences from fiador, obligations and risks Like the fiador, the avalista will be someone who takes responsibility for the payment of the debt in case of default by the credit holder, through letters or notes. Unlike the fiador, who pays the debtor’s default bond , the avalista pays the guarantee, which is used most often in the financing of legal persons, such as companies and organizations. The guarantee can be achieved by the total value of the debt or a lower one , and a signature on the back of the document is enough to seal the commitment. The figure of the avalista is more relevant for companies , unlike the fiador who acts as guarantor of an individual person. The endorsement thus contributes to the growth of small and medium-sized enterprises , often representing the only way for them to obtain financing from banks. Thus, a avalista is jointly and severally liable, in which both the debtor and the avalista assume the same responsibility in the claim , and the creditor entity may trigger the assets of any of the figures in case of default. It is common for the avalistas to be the partners or administrators of the companies for which the financing is requested from the creditor entities, doing so to facilitate the obtaining of this loan. As with bail, in the event of non-compliance, the avalista’s personal property may be at risk of execution. However, if the avalista presents a vulnerable economic situation, he may request a special procedure for settlement in the payment, with the creditor, based on a payment plan to facilitate and allow the guarantor the commitment made in the payment of outstanding amounts. In the last case, failing to secure the payments, the avalista may request a personal insolvency application with exoneration of the remaining liabilities , that is, request the forgiveness of the debt. If you are clear and would like to learn more about what a credit involves, we suggest you read Building credit: what is it and how does it work? , Credit intermediaries: how do they work? or Cancelling the mortgage: all you need to know
Source: Freepik Author: Redaction Having your own home can be achieved through, for example, the purchase of a property already built, ready to live, or a land where you can proceed to the construction of your dream home , through a project and license. This second option is increasingly adopted by families, who find in it a more economical and personalized solution, and can be cheaper than buying a new property. Still, as with the traditional purchase of a property, building a house from scratch can involve a large investment that requires some financing from the bank. What is building credit? Construction credit is a banking modality granted for the financing of expenses with works, constructions and interventions in real estate, allowing the borrower to take greater liberties with regard to the size of the property, typology, finishes and other features involving costs. Before, housing credit was only granted to those who had already bought a land with viability for construction , and the bank loan did not cover the purchase of the same, however, currently there are already several banks that facilitate the process, offering credit both for the acquisition of the land and for the respective construction works. Thus, very similar to housing loans, being a variant of this type of financing, construction credit focuses specifically on construction/construction costs. Main features To begin with, it is necessary to consider that the amount of this loan is established on the basis of the assessment of the architectural project and its project specifications , as well as the construction budget, calculation of the implicit expenses to determine the amount necessary for financing . Once approved, this credit is paid by the bank in tranches - or installments - being delivered as construction is carried out. At this stage, site surveys are carried out by experts from the bank or financial institution to ensure that everything is going as planned , and the land on which the construction is being carried out is given as collateral to the bank. Another important thing to retain is that this loan has a grace period of capital that can range from 24 to 36 months , implying the payment of interest during this period. This allows financial relief in the early stages of the process. What should you pay attention to when applying for this type of credit? If you submit an application for construction credit, you should take into account that you will not be given the full amount requested, as in housing credits. Therefore, before proceeding, consider that, usually, the maximum amount of this credit corresponds to 90% of the total value of the construction, which is determined through the initial evaluation of the land, the specifications, architectural design and budget presented. Then there are banks and financial institutions that can present you the money only after the construction has started, implying that you are the one to bear the charges at the beginning, with equity, until the delivery of the first tranche of the payment. And finally, if you choose a credit for the purchase of land, then to build a house there, the total amount borrowed by the bank may be higher, as it is allocated separately through a percentage corresponding to the land and another for the construction. It is important to note that each situation is specific and the allocation of amounts may vary from bank to bank and from case to case , and may, in situations such as applying for a loan for the construction of the property, have to be the owner to advance with 10% of their equity, with the bank to finance the rest. Important points: • To obtain a housing loan it is imperative that the land where you want to build (if you are the owner or are going to buy one) has feasibility of construction; • If you apply for credit without having the construction project, it is advisable to deal with the City Council before approving the construction of the land; • Calculate your expenses to know exactly how much money you will need for interventions , including architectural projects, license applications and project execution. Are you clear about these procedures? Read also Preventive maintenance: understand the importance of this concept , Are you going to remodel the house? Know the associated expenses and Will buy a house in plan? Advantages and disadvantages
Source: Freepik Author: Redaction Resorting to a credit intermediary is more common when buying a house, if there is a need for financing to cover the amount ordered in the sale. In this situation, you will be taking out a consumer credit to buy a property. However, it may apply not only to the real estate market, but also to the purchase, for example, of a car or appliance, and credit intermediaries operate in various market segments. If you don’t know what it is, how it works or what kind of professionals can guarantee it, this is the right article to read. What is a credit intermediary? As its name implies, credit intermediaries mediate between consumer and credit institutions , that is, between the person requesting the loan and the banks. It is essential to understand that under no circumstances are credit intermediaries who grant the loan. The credit intermediary will be the bridge between themselves, the consumer who needs the credit, and the banking institution , presenting proposals, advice and support. Thus, if you need a credit, you can use these entities to help you in the process with the bank , mediating the process and guiding you through the best possible option. Which entities can be credit intermediaries? To carry out this activity, entities are required to comply with certain requirements and to receive the authorization of Banco de Portugal (BdP), in order to ensure not only the fulfillment of consumers rights, as well as the legal duties to be able to carry out activity. A credit intermediary may be a natural person or company, provided that it has the authorization of Banco de Portugal to submit and propose credit agreements. And you can: • Provide support in the preparation of contracts; • conclude contracts on behalf of banks, provided that they are duly contracted by banks; • Provide expert advice services. Thus, a credit intermediary functions as an entity aggregating information , and may submit to it one or more credit proposals, one or more banking institutions qualified for this provision of services, as well as contractual services. In addition, one of its responsibilities is to provide advice and support in the various stages of contracting. What are the stages of contracting a credit? It is important to be aware of the step by step associated with the contracting of a credit, especially if you are using the help of a credit intermediary. 1. Submission of tenders and contracts At this early stage, the credit intermediary must contextualise it about all the possibilities of the consumer by presenting to it available credit products offered by the credit institutions authorised to grant loans. It is important that the credit intermediary provides complete, clear and easy-to-understand information to the consumer, delivering personalized pre-contractual information and being available to answer any questions that may arise. 2. Consumer support in the preparation of contracts If the credit intermediary decides to proceed with the contracting of a loan, it must gather all the necessary documentation for the procedures and deal with the associated bureaucratic issues, while clarifying the potential doubts that arise. This is a service that can be provided by credit intermediaries regardless of whether or not they have proposed or presented the contract with which the consumer will proceed. 3. Conclusion of contracts and provision of advice In this third stage, credit intermediaries are responsible for concluding contracts on behalf of credit institutions. In addition to this authorization, they should advise and recommend possible changes or corrections to contracts, alerting consumers to any situation. What types of credit intermediaries exist? Divided into three categories, although they can only operate in one, there are tied credit intermediaries , ancillary credit intermediaries and unbound credit intermediaries. Linked credit intermediaries These can work with several credit institutions, but only if they represent the majority of the market, acting on behalf of and under the full responsibility of these institutions. In this type of intermediation, where there is a contract between the credit intermediary and the institution, t he intermediary cannot charge the consumer charges, and his remuneration is paid by the banking institutions with which he works. Credit intermediaries in an ancillary capacity These intermediaries provide goods and services, with the objective of selling the respective goods or providing the respective services. It could be, for example, the intermediary of an appliance store or car dealership. In this type of intermediary, a different rule is applied: you can work with several credit institutions as long as they do not represent the majority of the market. Unbound credit intermediaries These intermediaries are not linked to any institution, so the intermediation contracts are concluded directly with the consumer. That is, it can establish its own conditions for the provision of services. In the contract, the value of the commission to be allocated to credit intermediation must be made explicit, and they are the only ones that can be designated as independent. Who is authorized to practice credit intermediation? As we explained above, the authorization of Banco de Portugal is necessary for the exercise of the credit intermediation activity , so those authorized to the activity are included in the lists published by the bank, which you can consult on the official website of the institution. Therefore, before using a service of this kind, consult the lists and make sure that the person or company you want to use is authorized to provide the service. There are several real estate agents authorized to this activity, which can help you in the process of not only buying a house, but also applying for credit from banks, presenting you the best proposals and offers. Explore all the real estate companies that advertise in SUPERCASA, here
Source: Freepik Author: Redaction The National Institute of Statistics (INE) advanced this Tuesday with data on the median values of bank valuation in housing, which increased in February, 10 € compared to the previous month . The value is thus fixed at 1,560 euros per square meter, with an annual rate of change of 5.5%, compared to 4.4% recorded in January. This is an increase of 0.6% , with the number of bank valuations around 28.3 thousand. Highlighted is the Autonomous Region of the Azores, with the steepest increase compared to the previous month, of 2.6% . The remaining regions also showed positive variations, however, the Autonomous Region of Madeira was the only one with zero variation and, compared to February 2023, the median value of the evaluations increased 5.5%. It was also in the Autonomous Region of Madeira that the variation was more intense, 19.1%, without any decrease. The INE bulletin also adds that in February, the median value of the bank valuation of apartments was 1,741 euros per square meter , increasing 4.8% compared to the same month last year, with the most pronounced values occurring in Greater Lisbon and the Algarve . In the Centre, on the other hand, the lowest value was recorded. Read: Less residents in Portugal bought a house in 2023 , More and more banks are partners of credit intermediaries
Source: Freepik Author: Redaction According to the National Association of Authorized Credit Intermediaries (ANICA), banks and credit intermediaries are increasingly forming partnerships to capture business , and have even marketed between 70% and 90% of the housing loans of the major national banks. The banks have organized themselves into partnership departments and are now determined to attract intermediaries, because they know that by doing so they will win more business, explains Tiago Vilaça, President of ANICA. These are benefits that average around 1% to 1.5% of the amount financed , when commissions are paid by banks to intermediaries in 90% of cases and, despite the fact that last year the real estate market saw a drop in new home loans, the business of credit intermediaries didnt really feel much of an impact. Leveraging the business of credit intermediaries was the transfer market , which increased exponentially: it has become a concern of the Portuguese to lower their house payment and ensure that the interest rate on the loan is fixed, so that the monthly payment doesnt go up significantly again, concludes the head of the association. Continue reading: More families opt for mixed rates on home loans and Are you buying a house? Negotiate the best credit conditions
Source: Freepik Author: Redaction AICCOPN has released to SUPERCASA Notícias its latest housing statistics summary , with advanced production indicators for January 2024. According to the information received in a press release, cement consumption on the domestic market totalled 3,632 thousand tonnes up to November, corresponding to a year-on-year increase of 2.5%. In terms of municipal licensing , in the first eleven months of 2023, there was a year-on-year decrease of 9.3% in the total number of licences issued for new construction or refurbishment of residential buildings . However, in terms of the number of dwellings licensed for new construction, there was a year-on-year increase of 5.4 per cent, to a total of 29,703 dwellings. The stock of mortgage loans totalled 99.064 billion euros in November, a contraction of -1.1% year-on-year, and the interest rate on mortgage loans stood at 4.52% that month, up 2.93 percentage points on the same month last year. With regard to the median house valuation for the purposes of bank loans, there was a year-on-year increase of 5.6% in November. Region in the spotlight: Lisbon Metropolitan Area In the Lisbon Metropolitan Area , the number of dwellings licensed for new construction in the twelve months ending in November totalled 6,193, an increase of 1.5% on the 6,100 dwellings licensed in the previous twelve months. Of these, 9 per cent are studio or one-bedroom units, 29 per cent are two-bedroom units, 41 per cent are three-bedroom units and 21 per cent are four-bedroom units or higher. As for the bank valuation of housing, there was a year-on-year variation of 4.8 per cent in this region in November. Keep up to date with this and other topics in SUPERCASA Notícias
Source: Freepik Author: Redaction Last Monday, January 29th, the National Statistics Institute (INE) released the median bank appraisal values for housing , which stood at 1,536 euros per square meter in December 2023 , representing an increase of 6 euros compared to November. In year-on-year terms, the rate of change was 5.3%, compared to 5.6% in November. In the month under review, the number of bank appraisals was around 29,500, representing an increase of 0.8% when compared to the previous period, as well as an increase of 21.8% year-on-year. As for the annual variation, the median appraisal value was 1,521 euros per square meter in 2023 , representing an increase of 8.6% compared to 2022. According to the statistics office, the biggest increases were in the West and Tagus Valley, with values rising by 2.1% compared to the previous month, while the only decrease was in the Autonomous Region of the Azores, which recorded -0.2%. When comparing the values with December 2022, the median value of bank appraisals of real estate increased by 5.3%, with the most intense variation occurring in the Autonomous Region of Madeira, with 15.5%, and the smallest in the Algarve, with 0.9%. Read also: More than 5,000 families have already asked for their housing payments to be fixed
Source: Freepik Author: Redaction According to data released by the European Central Bank (ECB), in the second quarter of 2023, more than two thirds of Portuguese households net wealth was concentrated in real estate assets, namely the property where they live. At the end of June 2023, the average net worth of households in Portugal was 271,000 euros, 66.3 per cent of which was concentrated in real estate. The average exposure of each Portuguese household to property assets was 179,000 euros at the end of the second quarter of last year, a figure around 1.7 times higher than in the last ten years. Among the assets that make up the wealth of Portuguese families, only exposure to investment funds grew more than property. However, the average amount applied to all households translates into only 3.5 per cent of per capita household exposure to real estate assets. The predominant investment in real estate is common to the vast majority of Eurozone countries , with Slovenia and the Netherlands registering more than 80 per cent of net wealth in real estate assets. National wealth still far behind Europe In addition to property assets, Portuguese households continue to show a strong inertia in reallocating their financial portfolio. Since 2020, deposits have represented the largest share of household financial assets, even at times when interest rates on new deposits are less than 0.5 per cent, according to data from the Bank of Portugal. Despite the large amount invested in term deposits, this is only equivalent to 30% of the total exposure in real estate assets, data that reveals the high commitment of the Portuguese to the property sector. Follow more news on Real Estate in SUPERCASA Notícias
Source: Freepik Author: Redaction According to data released by the National Statistics Institute (INE), the median value of bank appraisals rose 0.2% in September, to a total of 1,541 euros per square metre, 3 euros more than the previous month. This is the highest value ever, the seventh consecutive month of monthly rises. However, the INE data points to a slowdown in the increase in bank valuations. September of this year saw the lowest monthly variation since February. In turn, the year-on-year growth rate was 7.84% in September, 0.93 percentage points less than in August. This is the second lowest year-on-year change since March 2021, after the 7.61 per cent recorded in July 2023. The Autonomous Region of Madeira showed the most significant increase compared to the previous month (2.8 per cent) and the Algarve the biggest drop (-0.6 per cent). Compared to September 2022, the median value of valuations grew by 7.8%, with the most intense variation in the Autonomous Region of Madeira (25.2%) and the smallest in the Centre (6.9%), INE reveals. For flats, the median bank valuation was 1,708 euros per square metre , which, compared to September 2022, represents an increase of 7.35%, the lowest year-on-year growth rate since February 2021. In the case of houses, there was a median bank valuation of 1,198 euros per square metre, 5.45% higher than in the same period last year. Also read: No brake on rents, Government supports up to 4.94% of the increase , Banks confirm downward trend in housing loans
Source: Freepik Author: Redaction If you have a home loan or are considering taking out one, you should know that there is a credit scheme for disabled people with a degree of disability of 60% or more - subsidised credit. Institutions are not obliged to grant credit under this special scheme , however, the client is entitled to convert their loan when the degree of disability is acquired after the home loan contract has been signed. Characteristics of subsidised credit Loans contracted under this scheme have a maximum term of 50 years and have an interest rate subsidy equal to the difference between the reference rate for calculating subsidies (TRCB), set by Ministerial Order no. 502/2003 of 26 June, or the contracted interest rate when it is lower than the TRCB, and 65% of the European Central Banks reference rate. The maximum amount of the loan is updated annually on the basis of the consumer price index and may not exceed 90 per cent of the value of the property appraised by the credit institution or the cost of the conservation work. However, as is the case with the general home loan scheme, the institution can request this type of insurance. What are the conditions of access? The subsidised credit scheme is reserved only for people with a degree of disability equal to or greater than 60% , proven by a medical certificate of multipurpose disability . However, there are other requirements, such as: - You must be over 18 years old; - The loan cannot be used to buy the property of ascendants or descendants of the person concerned; - No member of the household has another loan under any subsidised credit scheme; - The property must be mortgaged and cannot be sold for a minimum period of five years (except in the event of unemployment, death of the holder, change in the size of the household or professional mobility). I already have a mortgage, can I switch to the subsidised loan scheme? Not all institutions offer this scheme, as it is not compulsory by law from the outset . However, if you have acquired a degree of disability equal to or greater than 60% after signing a permanent home loan contract , you can switch your loan to the subsidised credit scheme for people with disabilities. As such, it is possible to change your home loan to this scheme if you have a degree of disability equal to or greater than 60% after taking out the loan . Dont forget, however, that you need to present a medical certificate of multipurpose disability. To migrate to this scheme, you must fulfil the access conditions and submit an application to the credit institution requesting the change . The term of the loan covered by this scheme will take into account the number of years elapsed on the previous loan, and the sum of the terms of the two loans cannot exceed 50 years. Read more on SUPERCASA Notícias
Source: Freepik Author: Redaction The INE (National Statistics Institute) confirms an increase in the median value of the square metre in August, which reached €1,538, setting a new record compared to the increase in July . Despite the previous slowdown, the value of bank appraisals is once again accelerating. In year-on-year terms, the rate of change is 8.8 per cent, compared to 7.6 per cent in July. According to the statistical office, the most intense variation was seen in the Autonomous Region of Madeira, with 23.1 per cent, while the least significant was in the north, with 7.9 per cent. As for the monthly comparison, INE explains: all regions showed increases compared to the previous month except the Algarve (-0.6 per cent), with the most significant increase in the Autonomous Region of the Azores (5.6 per cent) . With regard to the number of bank appraisals, the figure stood at 24,600, which, according to INE, represents a decrease of 1.1 per cent compared to the previous period and a reduction of 6.3 per cent year-on-year . It can therefore be concluded that fewer people are asking for property valuations, while the value of the square metre is rising. The regions where the median value of the bank appraisal of housing is the highest are the Algarve, Área Metropolitana de Lisboa, Região Autónoma da Madeira and Alentejo: they had appraisal values 40.7 per cent, 33.6 per cent, 10.9 per cent and 5.1 per cent, respectively, higher than the countrys median. On the other hand, the lowest values were found in the North: Terras de Trás-os-Montes, Beiras e Serra da Estrela and Alto Alentejo were the regions with the lowest values in relation to the countrys median (-48.8%, -47.4% and 46.6% respectively) . Also read: Home loan portfolio has been falling for eight months , New moratorium on home loan interest: how does it work?
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