Refinancing in Portugal?

[Henrique D.]

I'd like to apply to BRRRR method in Portugal but I'm struggling to understand how to do the refinance part. Unlike the US banking in Portugal is consolidated in a few banks which means that things that are common in the US like credit unions or local lenders are not found there.

Has anyone had experience in doing BRRRR with Portuguese lenders?

[Henrique D.]

Hi, @Mike Lambert I've been talking to some credit intermediaries to get some clarification on the various financing options available. And one of the things I've been told is that there is no seasoning for refinancing which contradicts what you said about the two year period. Can you provide more info on where you got that information? Could this be specific to a bank you spoke to or the property?

I received wrong information from people in the Portugal RE industry before so I'm not super confident the person I talked to is correct I'm just trying to get more data points.

In case it's useful for others these are some other bits of info I've learned

• Refinancing is possible but it is more expensive than conventional (usually the spread is 1-2% higher) and it is necessary to explain to the bank what will be done with the money.
• It is not necessary to wait to own the property for a certain time to obtain mortgage credit. This credit can go up to 30 years.
  
• An alternative to refinancing is to take out a loan for purchase and renovation, which requires a 30% down payment. The renovation budget can be artificially inflated so you can have a "cash pillow" for maintenance or anything else really.
  
• The conventional loan for purchase and rehab is the most commonly used by investors
  
• If you have a company it is also possible to apply for loans but it is necessary to have at least 6 months of activity. The maximum duration of commercial loans is 15 years.