The first step in Getting a mortgage in Portugal is establishing your credit. You must establish your credit history. If you have a thin file, a lender may not approve your mortgage application. Having a clean file, however, can help you get approved for a mortgage. Here are some steps to take to establish your credit.

Paying off your old debts and building a credit score is a great way to improve credit. The higher your credit score, the less your mortgage will cost. However, your income is only one piece of the puzzle. To determine if you can afford your monthly payment, lenders also consider your debt-to income ratio (DTI). Usually, the maximum DTI for borrowers is around 50%.

You must build your credit before you apply for a mortgage. If you don't have any credit history, you may struggle to get a pre-approval. To begin building your credit, apply for a starter credit card and make regular payments. This activity will take six months to appear on credit reports so be patient. You must repay your new card each month on time. This will build a positive payment history and help you get approved for a mortgage.

A down payment is money that you pay down before you purchase a home. The type of loan you apply for will determine the amount of your down payment. The terms of your mortgage will be better if you have a larger down payment. Your monthly payments will also be lower if you have a smaller down payment. A conventional loan requires a down payment of 3%. Private mortgage insurance (PMI), which is required for conventional loans, may be required if your downpayment falls below this amount. A 20% down payment is best because you will get a lower interest rate and avoid PMI.

The process of obtaining a mortgage is not complicated. In general, lenders require applicants to provide documents that verify their assets and income. If you have a car, for example, you will need proof. Then, if you rent, you will need to provide a list of all your debts. If you have any credit cards, it is important to pay them on time. If you rent, you will need to show a landlord's letter verifying your payments.

Before applying for a mortgage, you must prove your assets. You must provide bank statements from the past 60 days. Your credit score should be between 300 and 850. The higher your credit score, the more likely you are to qualify for a lower interest rate. Before you begin looking for a home, it is important to verify your credit score. You can also improve your credit score by paying your bills on time and reducing your debts.