Financing an Ibiza Property as a US Buyer
Cash, a Spanish mortgage, or leverage at home: the honest picture of how Americans fund a purchase here.
Most of our US clients fund a purchase in one of three ways. Many buy in cash, which keeps the transaction simple and can strengthen a negotiating position. Others take a Spanish mortgage as a non-resident, keeping leverage in the same currency as the asset. A third group borrows at home against US assets, through their own bank or wealth manager, and arrives in Spain as a cash buyer. That last route is worth a conversation with your US bank, and we will not pretend to advise on it: the terms depend entirely on your relationship there. What we can do is make sure whichever route you choose fits the Spanish timetable, because the arras contract sets a completion date that your funding must meet.
Spanish non-resident mortgages
Spanish banks lend to non-residents, on more conservative terms than residents receive. Typically that means 60 to 70 percent loan-to-value and terms of up to about 25 years. Banks will want proof of income, and you will need a Spanish bank account, which is required for the purchase in any case. Approval takes time, so if a mortgage is part of the plan, we begin those conversations before the arras is signed and, where useful, make the contract conditional on financing. We can introduce you to brokers who work with non-resident buyers daily and who present US income documentation in the form Spanish lenders expect.
Currency: the quiet variable
A purchase priced in euros and funded in dollars carries exchange exposure at two moments: the deposit at the contrato de arras, typically 10 percent, and the balance at completion. Between those two dates the rate will move, and on a purchase of this size, small movements matter more than most fees. Our currency exchange specialists consistently achieve better USD to EUR rates than retail banks, and they can discuss ways of managing the exposure between arras and completion. Together with power of attorney and video walk-throughs, it is one more part of a process that Hoy Hoy Ibiza coordinates for US clients without a single unnecessary flight.
Talk it through with an advisor
We work with US-based clients across time zones. Book a call at a time that suits you.