Monthly Archive: September 2019

Mortgage surrogate: how much does it cost?

You believe you have found the right bank to make the mortgage subrogation. You’re excited about the lower installment of the old mortgage and sign the new contract.

However, they inform you only at the end that a commission will be applied for the subrogation operation on your mortgage of around 2,000 euros.

But is that really what it should be? Let’s find out together.


Mortgage surrogate: let’s clear up some doubts

Mortgage surrogate: let

If this situation has already happened to you and you have run into some trap by paying undue costs to transfer your mortgage, do not despair, you are not the only one.

If you want to save time and money with your first home loan , but your new bank has deceived you, this post is for you. In this article I want to guide you through the things you need to know to get the subrogation and save time and money. What you will learn in this post will let you know how to move with the banks starting immediately.

The bank that granted the loan cannot deny or make the subrogation of the loan to its client.

Therefore, contractual clauses providing for the charge of penalties or other charges to be borne by the borrower are to be considered as having no foundation.

No charges or commissions may be imposed on the customer for:

  • the granting of new loans;
  • the investigation;
  • cadastral assessments.

In particular, the cadastral assessments are carried out according to procedures of collaboration between intermediaries based on criteria of maximum reduction of time, obligations and associated costs. Intermediaries do not apply to customers any kind of costs, even indirectly, for the execution of the formalities connected with the subrogation operations.

Any agreement subsequent to the stipulation of the contract, with which the exercise of the subrogation is prevented or made burdensome for the debtor, is also void.

Therefore, one of the greatest advantages of the subrogation mortgage lies precisely in the fact that the customer has no further additional charges and expenses of any kind. He must not pay either the substitute tax, notary fees (charged to bank agencies), or pay the bank the costs of preliminary investigation and appraisal.

The only expenses that the borrower will have to face are the charges related to the payment of state stamps and the costs of opening the new current account, with the incoming bank.

So, you don’t have to worry about subrogation costs because it’s a completely free operation!


The mortgage subrogation is a totally free instrument by law

So it is imperative to keep costs under control

If you impose costs that you should not pay and you have difficulty managing the situation, contact me and we can talk about your problem with confidence.

Contact me if you are considering subrogating your mortgage , we can talk about your case and carefully check the details and clauses of the subrogation proposal that the bank has made to you.

The ABC of Credit: The Key Concepts and Their Meanings

Here is some advice for life: never sign a contract full of terms you do not understand. With regard to credit, there are also some concepts that should be understood before entering into a contract. So that there is no doubt about the main terms used in the credit, we explain each of them in this article.


Interest rate

Interest rate

Interest rate = the cost of money

The interest rate is popularly known as the cost of money . In the case of a credit, it is the cost you will incur by using the bank money. We can have three types of interest rates :

  • Fixed rate – A much used modality in personal credits in which the rate is fixed and unique throughout the entire contract;
  • Variable rate – This modality is most used in housing credit agreements, with the cost of credit resulting from the sum and from an indexer (in Portugal we use the EURIBOR rate) and a spread.
  • Mixed rate – The fixed rate modality can be contracted in housing credit contracts where there is a flat rate for a shorter period (eg 2, 5 or 10 years) and change to variable rate in the rest of the contract.



EURIBOR = the cost of money to banks

The EURIBOR is an interest rate that serves as a reference for credits in Portugal. This rate results from lending operations between the major banks in the Euro Zone and is determined for different periods (1 week, 2 weeks, 1, 2, 3, 6, 9 and 12 months). You may interpret the EURIBOR as the cost of money to the bank, the cost to you of the bank, plus a margin (which we’ll tell you about below).



loan cost

Spread = the risk margin of a loan

The spread is the margin that the bank places on its cost (EURIBOR) in a credit agreement. This margin is associated with the risk of the operation and may be reduced in the event that the client is more involved with the bank.



APR = actual cost of the loan

Borrowing money from the bank involves a set of costs that does not come down to the interest rate. All credit operations have associated other costs including commissions, insurance, bank account costs or other (hence it is important to choose a bank without commissions in the current account). The APR, or Annual Effective Annual Rate, is the interest rate that aims to group together in a single indicator the amount paid. In other words, it is the real cost of the loan and it is this rate that should be used to compare different offers.



credit agreement

The MTIC is the total amount charged to the customer in a credit agreement. By analyzing the MTIC you will get an idea of ​​all the costs that will be charged to you throughout the contract, assuming that the interest rate would not change. You should analyze this MTIC in parallel to the APR to compare different credit proposals.


Conclusion (and work from home)

In this article, we have left you some of the key concepts associated with a credit agreement. Knowing what each one means is your best weapon in order to get cheaper credits and make better financial decisions .

Now that you’ve been given the lesson, as a housework you will have to do different credit simulations to realize, in more practical terms, the cost of your credit. So, see what would be the cost of your personal credit and the cost of housing credit in a credit simulator.

Debt Ratio: Know Your Financial Commitment

Working with third party capital to drive a company’s growth is a common practice, but when mismanaged it can lead to management problems. To avoid this, it is important to keep a constant eye on the debt ratio and make sure that the financial commitment is acceptable.

Most entrepreneurs even know the full amount of their debt with financing and suppliers, but this number has no tangible significance as it does not show how much of the venture’s capital is committed. The total debt value is just one of the financial indicators to be evaluated, as is the index.

To learn more about this index, how to calculate it and interpret the data obtained, read on!

Learn how to calculate the debt ratio

To do this, one does not have to have specific skills let alone pay to obtain it. The index is a simple account whose basic numbers can easily be found on the balance sheet . Check out how to make this account uncomplicated and efficient:

With the balance in hand, find the values ​​of current and noncurrent liabilities. They show the amount of third party capital being used in the company in the short and long term, respectively. Keep in mind also the value of the total asset.

The debt ratio is the result of dividing the sum of liabilities by asset. To get the percentage, simply multiply this number by one hundred, as follows:


With this formula, you get the percentage value of your company’s debt. Obviously, the bigger it is, the worse the financial situation you are in. However, there is no default value indicating a healthy debt ratio. Generally, starting at 70%, the dependence on third party capital is excessive.

Interpret the data obtained

Interpret the data obtained

An interesting thing about financial ratios is their ability to indicate paths and solutions. With the debt ratio is no different.

Even if the value is high, it is only a worrying number if the company’s commitment is made to cover other debts and obligations, causing the so-called snowball. Otherwise, the percentage may indicate that new investments are being made to drive growth.

Even the interest on bank financing can be negligible given the increase in revenues resulting from the expansion of the venture. That is, if your business is in this scenario, there is nothing to worry about.

When indebtedness is caused by a large number of obligations


You need to review costs and perhaps renegotiate debt to improve working capital and even analyze the balance sheet and income statement to find exactly what is hindering the performance of your debt. company.

That way you are more likely to reduce the amount of third party capital in your business, gain strength in the asset and improve your financial decision-making power, relying less on loans to keep the business strong and thriving.

It is very easy to calculate the debt ratio, isn’t it? Share this text on social networks and help other business owners calculate this index in their business!