Non-residents of any country always look for opportunities to buy property where they have shifted and are planning to stay there permanently.
In Dubai, home loans or mortgages can be obtained by non-residents and expats as well. The process has eligibility criteria and conditions.
To obtain a mortgage, you will get to know what kind of eligibility requirements there are, what types of loans are available, and what documents are required for those who want to invest in real estate in Dubai. Here are the ways non-residents can get a mortgage in Dubai.
Mortgaging in Dubai for Non-Residents and Expats
Although non-residents and expats can get a mortgage in Dubai, several financial and legal conditions need to be fulfilled which may vary slightly from the criteria of the lender but remain on the whole very similar.
Minimum Age:
- The applicant client needs to be more than 21 years old and not more than 65 years old at the time of repayment of the mortgage.
- Age of maturity normally
- 65 keeping in view the client in question.
Minimum Annual Income:
For non-residents and expats, there is a minimum annual income that has to be presented, which is normally between AED 15,000 to AED 30,000 in terms of the scope on a monthly scale.
This step ensures that the lender is offered a comfortable payback from the borrower in the case of the mortgage.
Employment Status:
Expats must have been working in a well-known company or be self-employed with all the proper documentation, such as registering the business or paying tax returns. The bank may request proof of employment or any valid work contract.
Credit Score:
- Good international credit rating of the applicant
- Some banks obtain a credit report from the applicant's home country or check his credit report in the UAE through the Al Etihad Credit Bureau (AECB).
Down Payment Requirements:
The down payment for non-residents will normally be higher than for residents. Indeed, the required down payment usually ranges between 20% to 25% of the property value.
Requirements in Dubai Mortgage Document
For an application for a Dubai mortgage, a number of documents must be submitted to establish the applicant's financial worth, identification, and eligibility. The terms and conditions regarding the document requirements are maintained between the bank and the applicant.
Identity Proof
- Passport Copy: It should be valid for at least six months.
- For the UAE residence visa, or proof that he is non-resident, if applicable
Income Proof
- Salary slips for 3–6 months
- Bank statements for the last 6 months
- Tax returns or financial statements for self-employed persons
- The applicant must have document property ownership
- Sales and purchase agreement or contract for the property.
- The valuation report, which mostly the lender requires to determine the market value of the property.
Credit Report:
- Credit report from the applicant's country.
- AECB credit report from UAE if available.
Down Payment Proof:
Bank statements showing proof of the amount done on the down payment.
Mortgages for Non-Residents and Expats in Dubai
So, when applying for a mortgage in Dubai, non-residents and expats alike have options for mortgage products that provide variant financial needs and preferences.
Fixed Rate:
- The interest on the mortgage is constant throughout the term of the mortgage generally 1–5 years;
- Suitable for expats who expect predictable monthly payments and stability about their mortgage costs.
Variable-Rate Mortgages:
Paying the interest rate with fluctuations tied to the changes in UAE Central Bank or market rates. A suitable option for flexible borrowers who will be willing to accept possible fluctuations in interest rates and can manage variable payments.
Interest-Only Mortgages
- Pays only interest on the loan for some time, say 3-5 years, during which no principal is serviced.
- A suitable option for investors who prefer maximum cash flow in the short term but pay later.
Offset Mortgages
- A mortgage tied to a savings or current account.
- The bank calculates the interest payable on the loan balance minus the amount maintained in the offset account, which can be used to pay reduced interest payable in the long run.
Sharia-Compliant Mortgages (Islamic Home Loans):
This can be used by non-residents and expats based on compliance under Sharia law. This type of mortgage is entertained based on a profit-sharing model or a lease-based arrangement with the financier rather than interest.
Mortgage Interest Rates for Non-Residents and Expats
Mortgage interest rates in Dubai differ with the type of loan, lender, and applicant's profile. However, though the rates are competitive, nonresidents and expats will be quoted at slightly higher rates than residents.
Fixed vs. Variable Rates:
Fixed rates provide stability, meaning that the mortgage payments don't change over a stipulated period of time, which can be 1 to 5 years.
Variable rates are by nature dynamic, for they may float with market or central bank rates, leading to savings in an environment of a falling rate.
Interest Rates Range:
Loans for expats and non-residents range from around about **3% to 4.5%** per annum, depending on the type of loan and the type of lender.
Teaser rates
Some lenders advertise teaser rates, in which lower interest rates apply for the first couple of years of the mortgage term only.
Loan-to-Value (LTV) Ratio:
In general, the maximum LTV ratio for non-residents in this market is 60–80%. This allows for financing 60–80% of the property value while the remaining amount is paid as a down payment./p>
How to Obtain a Mortgage in Dubai
Applicability for a mortgage, for a non-resident or expat, in Dubai involves several steps from pre-approval to final loan disbursement. This process requires patience and groundwork.
1: Pre-Approval
- Contact a bank or mortgage lender to apply for a loan pre-approval.
- All paperwork includes proof of income, identification, and credit score.
- Pre-approval will help the bank decide how much would be the loan amount with what interest rate.
2: Property Search and Valuation
After having been approved in advance, start looking for a property within your budget. Once you have found a particular property, the bank will ask for a valuation of the said property to establish what its market value is worth.
3: Mortgage Application
Submit the formal application and all appropriate documents. The bank will analyze your financial statements, the worth of the property, and your eligibility.
4: Mortgage Offer and Agreement
The lender will make an official mortgage offer in case you are approved. Study by the terms of the agreement which will include the interest rates, schedules for repayment, and all other applicable fees.
- Following the down payment, the bank issues the loan.
- It is then transferred to your name with the title of the property.
Conclusion
The process from applying to getting the mortgage in Dubai needs planning regarding the application until the disbursal of funds at the end. Dubai gives foreign investors and expats diverse opportunities, which may be accessed through the acquisition of a mortgage there. With these guidelines and an understanding and reliable lender, one will always find success investing in property in one of the world's most dynamic markets as a non-resident or expat.
FAQ’s
1. Can you get a mortgage if you are a non-resident of Dubai?
You can get a mortgage in Dubai. But demands are different; they require a higher percentage of down payment and proof of income.
2. How much is the maximum loan-to-value, or LTV, for non-residents?
Normally, a non-resident can borrow between 60–80% of value, depending on the lender.
3. What is the down payment that the non-resident needs?
The down payment by a non-resident will generally be in the range of 20 to 40% of value.
4. How much does a mortgage in Dubai rate?
The rates will differ from **3% to 4.5%** depending on the mortgage type and the applicant's financial conditions.
