Real estate in Dubai with a mortgage

The Dubai real estate market has experienced an unprecedented surge in popularity in recent years. And the reason is not only in the huge flow of tourists, but also in the number of transactions that have tripled in a few years. Apartments, villas, penthouses, apartments, duplexes and other properties have become a real "treasure", the value of which is rapidly increasing. The demand of investors and buyers is easily explained: this is a great way to keep your assets or invest in a profitable investment project. But what to do if you have only a part of the amount needed to purchase a home? Mortgages for foreigners in Dubai can be a solution to the problem. In this article, we will analyze what a non-resident needs to get a mortgage on real estate in the UAE.

Mortgage conditions in Dubai for foreigners

The procedure for obtaining a mortgage in Dubai is a rather complicated procedure. Some banks in Dubai do not issue loans for real estate due to the peculiarities of internal politics, others are willing to meet even under non-standard conditions.

The stages of obtaining a mortgage in Dubai include the following requirements:

• Status. Local banks provide mortgages to foreigners, but the conditions for residents and non-residents are different. Residents can get a loan in the amount of 80% of the total price of the property. For non-residents, the down payment is at least 50%;
• Age. An important parameter for the borrower was his age - a mortgage loan is provided to people aged 25 to 65 years. The maximum repayment period for a property loan in Dubai is 25 years. But the older the applicant, the less time he gets to repay the loan. Another important nuance is that the last mortgage payment must take place before the borrower becomes a pensioner by age;
• Income level. The total share of loan payments should not exceed 50% of the applicant's monthly income. It is also important that after repayments, the borrower has $900 left for each family member;
• Employment. The borrower must work for a local company or own a company in the UAE;
• Property. This item is not mandatory, but its presence will increase the chances of obtaining a mortgage loan.

Choosing a Bank for Mortgage in Dubai

In the United Arab Emirates, not only local, but also foreign banks operate. Each institution can offer the client its own conditions for mortgage lending, checking the potential borrower for compliance with the requirements before approval. Not only solvency, income and other loans, but also business reputation will be subject to verification. Unreliable clients will be weeded out immediately.

If the applicant has passed the verification, then he needs to provide a list of documents for obtaining a mortgage in Dubai:

• Application for a mortgage loan
• Statement of income for the past 6 months and information about the employer, or the results of the audit of the individual entrepreneur for the year
• Bank statement for the past 6 months
• Information about the composition of the family

After selection, the client has about 2 months to find suitable housing, pay the initial fee and confirm the intention to purchase this object with a document. The bank will conduct an independent examination to establish the actual value of the property and make a final decision regarding the mortgage.

What determines the mortgage interest rate?

• Rates start from 2.5% (for non-residents more often from 3.5%)
• Mortgage term — up to 25 years
• Mortgage amount - up to 80% of the cost of housing

Mortgage rates in Dubai are divided into:

Fixed rates - they are set on the basis of the refinancing rate (determined by the Central Bank) and include the repayment of directly debt and interest on the loan. A mortgage loan of this type cannot change during the entire term of payments. If the client plans to close the loan early, he will have to pay a fine - approximately 3 thousand US dollars.

Floating rates - the calculation of interest on the loan is made from the remaining amount of the debt. That is, every month the interest payments will decrease. But this rate can change even at the time of payments, depending on the state of the real estate market, inflation and other aspects of the economy. Typically, a floating rate is used for short-term mortgages up to 5 years.

The difference between mortgages and home loans

If we compare which is better - rent or mortgage, then the latter option will be more profitable. Today, the amount of annual rental housing is approximately 6-10% of the total value of real estate. If the buyer does not have the opportunity to pay the mortgage, then it will always be possible to rent out the housing and make further payments without any problems. The difference between a mortgage and a home loan is that the former has a longer repayment period, which can be up to 30 years. Mortgage housing is also pledged to the bank, while with a housing loan, you can leave other real estate as collateral.

If you want to know where you can buy property in Dubai with a mortgage, then UAE Assets specialists will help you. Our company works with the UAE real estate market and cooperates with local developers, so it has all the relevant information. We will advise you on issues of interest, help you find suitable housing and collect documents for obtaining a mortgage in Dubai. Call or fill out the feedback form on our website - we will contact you during business hours.