Foreign nationals in the United Arab Emirates (i.e., residents) or living in other parts of the globe (non-residents) can have 100% or absolute ownership of real property (including land, structure, rights, and interests) in Dubai’s freehold areas. Freehold areas include Dubai Marina, Palm Jumeirah, and Dubai Hills Estate.
What if you want to invest in real estate; can foreigners get a mortgage in Dubai? Yes, foreign UAE residents and non-residents can get real estate financing. Below, we provide you with a detailed guide on how to secure a Dubai mortgage for non-residents and residents. This guide is useful to you if you are interested in securing a mortgage and you are either one of the following:
• A resident or expat: a foreign national living in the UAE
• A non-resident: a foreign national NOT living in the UAE
1. Go to a bank or a mortgage broker.
Go to a lender to inquire about their mortgage options. If possible, talk to a bank with which you have an existing relationship—e.g., you have a bank account with them. That’s not a requirement, though. Technically, you can go to any bank in the UAE and ask about a home loan in Dubai for expats and non-residents, i.e., non-citizens and non-Gulf Cooperation Council nationals.
Note: Some UAE banks allow foreign nationals who are not living in Dubai to open a non-resident bank account as long as they have a valid reason for wanting a UAE bank account.
Alternatively, you can find a loan through a mortgage broker. We at McCone Properties offer this service, so you can come to us if you want our help applying for a non-resident or expat mortgage in Dubai.
Why work with a mortgage broker?
Working with a mortgage broker means getting access to mortgage deals from multiple banks and having the privilege to evaluate various options and choose the best that suits your needs. Some of these deals may come with preferential rates and terms that are available only through high-volume brokers but are otherwise inaccessible to walk-in banking clients.
Additionally, experienced brokers can help guide you into making the right decisions. The process can be more efficient because mortgage brokers know the lenders’ requirements by heart and can navigate the process of getting a mortgage in Dubai for non-residents and residents with their eyes closed.
Finally, working with a mortgage broker means guidance or hand-holding in the subsequent steps. Your mortgage broker will tell you what to do next and what documents to prepare and submit. They’ll become your primary contact person throughout the mortgage application process.
2. Prepare your documents.
Different banks may have distinct specific requirements for mortgage applicants. But the following should cover most of the UAE banks’ required documents.
Requirements for a mortgage for expats in Dubai
If you're a resident, you must provide a copy of your IDs (passport, visa and Emirates ID) and proof you’re:
• a resident (DEWA bill and tenancy contract)
• employed (salary certificate) or self-employed (business registration documents and company account records)
• earning, have money, and capable of paying (pay slips, bank statements, credit card and outstanding loan statements)
Applying for a Dubai mortgage for non-residents
UAE mortgages for non-residents have fewer requirements (typically just passport and bank statements. However, non-residents do have to own more equity outright (more downpayment) and are subject to more stringent evaluation criteria.
For instance, Dubai mortgages for non-residents may require you to pay out-of-pocket at least 40% of the purchase price. In contrast, home loans for expats in Dubai may require a deposit of only 20% for properties valued under AED 5 million and only 30% for properties AED 5 million and greater.
3. Apply for financing and secure loan pre-approval.
Consider whether to apply for a fixed-rate or a variable-rate mortgage. The former assures you of predictable monthly payments throughout the life of the loan. The latter comes with fluctuating rates. Future rates can be lower or higher than current rates, so a variable home loan interest rate in Dubai for expats and non-residents can save or lose you money depending on market conditions..
Next, submit your documents and home loan application. Your bank will assess your financial capacity, particularly if you can afford to repay the amount you’re borrowing.
How does the bank do this? They calculate mortgage affordability. To do this, they may take 50% of your income and deduct your outstanding loan repayments, your usual credit card bills and recurring expenses to compute how much remains. This can become their basis for deciding what monthly amortizations you can afford to make. After this, they may decide whether or not to lend you money and how much you can borrow.
On your part, you can also perform a rudimentary evaluation of your capacity to pay by using our mortgage calculator. To compute how much payment you may have to make monthly, you must know or be able to suppose the following:
• The property purchase price
• The amount of downpayment you can afford (or may be required) to pay
• The loan term, in years
• The interest rate
If you pass the bank’s eligibility evaluation, the bank will give you a pre-approval letter. The pre-approval letter will confirm your eligibility for a loan and the maximum amount the bank is willing to let you borrow.
4. Proceed with your purchase and finalize the loan.
During your pre-approval letter’s validity period, which can be from 60 to 90 days, finalize your property purchase. To avoid issues, buy property in Dubai that fulfills these criteria:
• Correctly valued
• Affordable deposit; you have the money to cover the required downpayment.
• Affordable amortization; you can afford the monthly payments based on your amortization calculations.
• Pre-approval letter coverage; the price (minus your downpayment) is lower than or equal to the maximum loan amount indicated in your pre-approval letter.
If everything is in order, do the following:
• Make an offer to the seller with your preferred terms. The seller might counter. Negotiate until you find the terms agreeable.
• Perform a property valuation. Your bank may require a professional appraisal to ensure the asking price is justified.
• Pay the deposit. If the asking price is reasonable given the property valuation, pay the seller your mandated share of equity (i.e., your downpayment).
• Finalize your loan and property purchase. Get final loan approval. The bank will transmit the loan proceeds directly to the seller once the chase transfer is final.
Costs
If the bank requires property valuation, they may charge you the professional appraisal fee. You must also pay 0.25% of the loan amount to register the mortgage, and you must also take out property insurance.
Dubai Home Loan for Non-Residents and Expats
UAE residents and non-residents can own property in Dubai. Can expats get a mortgage in Dubai? Yes, they can. How about non-residents; can they do the same? Yes.
Home loans for non-UAE residents may require fewer documents than Dubai mortgages for expats, but they may have higher downpayment thresholds, too.
Do you want to apply for a resident or non-resident mortgage in Dubai? McCone Properties can help you find the perfect deal and choose from the properties for sale in Dubai. Contact us now.
