What is a basic bank account?
Access to the credit intermediary activity
List of authorised credit intermediaries
How to protect yourself from online fraud?
Know your rights when making payments in Europe.
Do you know what the gross domestic product is? What about inflation? (only in Portuguese)
Key tips to protect yourself when choosing online or mobile banking services.
When a bank customer resorts to credit, the credit institution may require the customer to provide guarantees to ensure that the loan is repaid.
A mortgage is a real guarantee that falls on an immovable property or similar asset.
In contracting a loan, the credit institution may require the establishment of a mortgage on the property in its favour to guarantee the payment of the loan.
This type of collateral is often used in the case of home loan agreements.
It is common for the credit institution to require the constitution of a mortgage in its favour on the financed property. The property can be the dwelling acquired, constructed or renovated that is financed by the loan, including the land.
A mortgage can also be on a property belonging to a third person, for example of a relative, if the institution accepts this.
When assessing applications for home loans and other mortgage loans, the credit institution evaluates the property given as collateral for the loan. In this case:
If the customer does not comply with the commitments assumed and fails to pay the agreed instalments, the credit institution may initiate legal proceedings to recover the amount owed, which may lead to the executive sale of the mortgaged property.
The value of the sale of the property may not be enough to pay all amounts owed.
A personal guarantee is the guarantee provided by a third party – the guarantor.
The guarantor is responsible for the repayment of the loan. If the debtor fails to comply with his or her obligations, it is the guarantor who assumes this burden.
In the credit agreement it may be provided that, in case of non-payment of the loan by the debtor, the guarantor:
Has the benefit of prior execution – the guarantor may refuse to pay the defaulted amounts on the credit agreement, while the institution has not exhausted all possibilities for recovery from the principal debtor, including the execution of the debtor’s assets, or the sale of goods through the court to settle the debts; or
Waives the benefit of prior execution – the credit institution may directly require the guarantor to pay the amounts owed. If the latter fails to comply, the credit institution may execute the assets of the guarantor, even if there are still assets of the debtor that could be executed to pay those amounts in default.
A guarantor can never cease to be guarantor, unless the credit institution agrees that they be replaced by another guarantor.
The credit institution may require the purchase of insurance to cover the amount of the loan in case of, for example, death, illness or unemployment of the bank customer.
When taking out home loans for mortgage refinancing, the credit institution may require that life insurance be purchased by the customer and his/her spouse, which covers the amount of the loan taken out.
During the term of the home loan agreement, the credit institution must inform the insurer about the evolution of the outstanding amount so that it can update the insurance capital (Decree-Law No 222/2009).
Decree-Law No 74-A/2017 (in Portuguese only)
Decree-Law No 222/2009 (in Portuguese only)