Before embarking on buying a property in Spain it is crucial to ensure that you have all of your tax declarations and pay slips in order, as the banks will need proof of all of your earnings from your country of residence. There are many banks in Spain that pride themselves on having English speaking staff to accommodate your banking and mortgage needs. The bank will also provide a ‘Tasador’ – who will value the property independently and organise the necessary insurances.
There are some benefits to arranging a mortgage in Ibiza, as in Spain in general terms are more favourable for the buyer. There are lower interest rates and it’s easier to get out of agreements that aren’t working. Spain offers foreign investors deals free from commission on large international bank transfers and makes organising tax payments much easier.
Generally in Spain you need to put a 30-40% deposit down on any property and the mortgagee will lend you the rest. You can work directly with your real estate agency or mortgage lender on this and they can help with negotiations and any language barrier issues.
The rules around mortgage lending have tightened somewhat since the crash in 2008, making it all the more important to ensure that your lawyer has included an exit clause within the purchase contract so that you can cancel the agreement if the mortgage falls through.