Things to consider when getting a mortgage to buy in Ibiza

If you’re interested in getting a mortgage to purchase property in Ibiza, there are a few things you should know:

1. Spanish mortgages: Mortgages in Ibiza are typically offered by Spanish banks and financial institutions. Spanish mortgages usually have lower interest rates than mortgages in other European countries. Some of the more well know lenders will offer 1 million euro+ mortgages, while private banks also provide larger loans.
2. Apply for a mortgage before you bid on a property: Many buyers lose properties because they do not have the finances in place. It is important to get a mortgage in principle agreed before you submit an offer to buy a Spanish property. You can guide the mortgage lender to your budget and let them know the areas you like. The bank would work out the average property price in the area, and they can then let you know the taxes you would pay.
3. Loan-to-value ratio: The loan-to-value ratio (LTV) is the amount of money you can borrow compared to the value of the property. In Spain, the maximum LTV is usually around 70% for non-residents, meaning you would need to provide a 30% down payment.
4. Property valuation: Before approving a mortgage, the lender will require a valuation of the property to ensure that it is worth the amount being borrowed.
5. Legal and tax considerations: When buying property in Spain, there are legal and tax considerations to keep in mind. It’s important to work with a reputable real estate agent and lawyer to ensure that the transaction is legal and that you are not paying more taxes than necessary.
6. Residency status: If you are a non-resident, you may need to provide additional documentation, such as proof of income and tax returns from your home country, to qualify for a mortgage.
7. Are you planning to build your own home in Spain? Spanish lenders can provide self-build mortgages. They typically expect the plot to be purchased with cash or a loan; after that, they can fund up to 100% of the construction costs, with the funds being released in stages.

Aaron Strutt of yourspanishmortgage.co.uk says: “Overall, getting a mortgage to buy property in Ibiza can be a great option if you’re looking for a beautiful vacation home or investment property. However, it’s important to research and work with reputable professionals to ensure a smooth and successful transaction.”

Do you need a Spanish mortgage? Contact yourspanishmortgage.co.uk for expert advice