Pre-approval of mortgage credit: What comes next?

First: Sending documents to the bank.

The first step to apply for a home loan is the submission of documents to the bank from whom you intend to hire.

With this documentation, the bank will evaluate if the proponents have enough financial capacity to pay a monthly credit installment.

Only after analyzing this factor, does it move on to the pre-approval phase for credit.

I got pre-approved for credit, now what?

If, after document analysis, the bank determines that the proposed for the loan have the capacity to contract, it is possible to have a pre-approval of the credit.

At this stage, banks make their proposals through the European Standardised Information Sheet (FINE), detailing the conditions each one proposes. That is, what values, interest rates, loan terms, among others.  

This is where you should analyze in detail the different simulations, to find out which one is most suitable for you and/or your family.

However, it is important to emphasize that this phase does not require any commitment. It is possible to give up on the deal, even after requesting proposals and having pre-approval from more than one bank.  

Continuing with the business, you should choose a proposal for the home buying process to continue.  

Follows the evaluation of the property.

After pre-approval of credit and selection of the proposal, follows the property evaluation. This phase is crucial to determine the amount of equity you have to provide.

This is because the value that the bank lends is typically up to 90%. And having to provide 10% in equity, it applies to the lower value between the acquisition and evaluation. So, for example, if the property is being purchased for 200 thousand euros and is evaluated at 210 thousand euros, you have to pay 10% of 200 thousand euros.

But what is real estate appraisal? It is a process that evaluates the value of the property, based on factors such as location, characteristics, and the condition of the house.  

After this process and determining the value on which you will have to give a portion in own capitals, you have access to a final credit approval letter.  

Final approval letter for credit

The final approval letter decrees the final conditions of the credit, following the property evaluation. The bank is bound by this letter for 30 days, unable to change the proposed final terms.

In addition, between the final approval letter and the deed, there must be a reflection period of 7 days, so that future holders can consider whether they actually want to proceed with the credit.

Writing and turnkey solutions

Finally, after all the mentioned stages, the signing of the property deed can finally take place, where the transaction is signed.

Taxes necessary in real estate transactions are paid through the deed: Stamp Duty and Municipal Tax on Onerous Property Transmission.

Does it seem like a complex process? It may not be if you resort to the mediation of the process, through a fast and free service. With a credit intermediary Poupança no Minuto, you can have help throughout all these phases, so that you have the key to your home in hand without complications.