Are you thinking about investing in property in the UAE as a non-resident? We don't blame you. With year-round sunshine, global travel connections, and a red-hot property market, investment in the UAE, and in particular Dubai, is on the rise. It is possible to secure a home loan or mortgage as a non-resident. Here we give you all the essential information you'll need if you're considering buying here from overseas.
Obtaining a mortgage in the UAE as a non-resident can be complicated and long-winded. But it doesn't need to be. Arming yourself with the right information before you start the financing journey will help manage your expectations about your affordability and how long the process will likely take.
You'll need to have your documents in order. This will include your passport and proof of income in the form of a salary certificate or employment contract and three months' worth of pay slips. For those who are self-employed, you'll be expected to provide your company registration or ownership documents. You'll also need proof of residency in your home country and a good credit score. Naturally, documentation differs between countries.
Speaking with a mortgage advisor at Holo is totally free so check out our frequently asked home mortgage questions or use our mortgage calculator and one of our expert mortgage consultants will be in touch.
Before you start the application for a mortgage, you should research property prices and areas in the UAE. Doing this before you start the finance process will help you manage your expectations about what you are likely to be able to afford and the size of the down payment you will need.
You will need a deposit. Banks lend more conservatively with non-resident buyers so the deposit will need to be more than if you were a resident. Typically as a non-resident, you will be able to borrow up to 60% of the property value. Some banks may lend 65% but work with the assumption you can borrow 60% is the best rule of thumb.
To work out how much you can borrow using our mortgage calculator. In six easy steps, you can tell us you're a non-resident and how much your down payment is. We'll use this information to search for the best mortgage deals from across our UAE banking network. You'll be shown the products that best meet your requirements as a non-resident buyer and be able to compare rates for mortgages in the UAE.
Before you start the application for a mortgage, you should research property prices and areas in the UAE. Doing this before you start the finance process will help you manage your expectations about what you are likely to be able to afford and the size of the down payment you will need. You may wish to visit the country to do some of your own research.
You could instruct a Real Estate agent but be aware that many agents prefer you to have your finance pre-approved so that they know you are a serious buyer.
You'll be able to choose from Fixed and Variable Rate mortgages, and conventional or Islamic products.
A fixed-rate mortgage in the UAE means that the rate of interest you pay stays the same for a set period of time, normally between 1-5 years. During this period of time, your mortgage rate and your monthly repayment will not change.
A variable rate mortgage means the interest you pay will vary over time. Variable rate mortgages in the UAE are linked to the EIBOR. The EIBOR is a benchmark interest rate for lending between banks in the UAE with a percentage fixed by the bank. Most banks will adjust the variable rate every three months. Some banks offer variable rate options on a monthly or six-month period but this is less common.
With a conventional mortgage, the bank will lend you money to finance your new property. The mortgage consists of the loan for the amount you wish to borrow, and an interest rate applied to the initial loan amount. An Islamic mortgage is a Sharia-compliant way of financing the purchase of a property. Under Sharia, Law banks are not allowed to charge interest on a loan. Instead, the bank will technically buy the property for you and lease it back to you until the mortgage term is complete.
Working with a mortgage advisor or broker will help you get to grips with the process of securing property finance. But enlisting a mortgage broker can add an additional AED 5000 to the cost of buying a property in the UAE. At Holo, we work on your behalf all the way through the process from the minute you use our calculator, to the second the keys are in your hand. The best bit? We do not charge any fees and are 100% free and ten times faster.
Ready to take the next steps? Let's get you started.
This blog is for educational purposes, but everyone's case is unique, and local guidelines and regulations may change. Our mortgage advisors can help you with any question you may have and have the latest advice. Get in touch.