Buying property and obtaining a mortgage in Ibiza for British people is similar to the process for any other nationality. There are Spanish lenders keen to offer larger mortgages to buy in Ibiza.
Research and Budgeting: Once you have spent time searching online properties and visited Ibiza to understand property prices, locations, and types of properties available. Determine your budget and the type of property you’re interested in (apartment, villa, etc.).
When it comes to getting a Spanish mortgage, lenders will assess your overall financial situation, including your expenses to run properties you currently own.
Legal Advice: It’s advisable to seek legal advice from a solicitor or lawyer who specializes in Spanish property law. They can guide you through the process, ensure all legal aspects are covered, and protect your interests.
Spain has a very secure property purchase system using ‘seller reservation agreements’.
Once you decide to buy a property and a price is agreed you will have to enter into an ARRAS contract. You typically put down a 10% deposit and agree to complete within two months. Unlike the UK system, if the seller pulls out, they have to give you double the ARRAS amount back.
Mortgage Pre-Approval: If you need a mortgage to purchase the property, you should get pre-approved for a mortgage from a Spanish lenders or a bank that operates in Ibiza. You’ll need to provide financial documents such as income statements, bank statements, and proof of employment.
A huge number of buyers lose properties because they do not have the finance in place.
It is important to get a mortgage in principle in place before you submit an offer to buy a Spanish property.
How much of a deposit will you need for a Spanish mortgage or an Ibiza villa? Non Spanish resident buyers will need a 30% deposit, so 70% of the purchase price. Costs and fees will normally be between 8% and 14% of the purchase price.
Property Valuation: The lender will typically require a valuation of the property to ensure it’s worth the amount you’re borrowing. If the property is a new build or it has been on the market for a while, the property may be down valued.
Negotiate and Make an Offer: Once you find a property you’re interested in, negotiate the price with the seller or their agent. Once you agree on a price, you’ll make an offer in writing. Make sure you have a mortgage in principle before you make an offer.
Once the mortgage application is submitted a decision in principle normally comes back within a few days. The property valuation often takes a week.
Exchange Contracts: Once the offer is accepted, you’ll exchange contracts with the seller and pay a deposit (usually around 10% of the property price). This is typically done through your solicitor or a notary.
All property completions are done through a Spanish notary and sent to the registry. This process is even safer when you take a mortgage because the lender will ensure the property is legal and properly registered and that it values up. The bank’s legal agents will also double check the property is correctly registered and all costs are settled.
Finalise Mortgage: Finalize your mortgage application with the lender. They’ll conduct further checks and due diligence before approving the mortgage.
Completion on Ibiza property: On the agreed completion date, you’ll pay the remaining balance of the property price, along with any associated fees (taxes, notary fees, etc.). Your solicitor will handle the transfer of ownership.
Remember that the process may vary depending on the specifics of the property and the mortgage lender’s requirements. It’s essential to do thorough research, seek professional advice, and ensure all legal aspects are properly handled throughout the process. We can help you navigate this process
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