Owning property takes financing. Whether you are buying in your home country or investing internationally, getting a home loan is ideal. However, the rules for expat home loans may be different than the rules for UAE citizens.
It pays to talk with a reputable estate agency before starting to invest in this region as the loan rules may not be favorable all the time. You got to be ready to meet the rules if you want to make money through international real estate investment.
While there may be some slight differences between UAE banks, home loans for ex-pats in the UAE look something like this:
It pays to talk to a reputable real estate agent as they know the best places for expats to get a loan. It is not complicated but it is also not as easy in many cases. Having expert help means you should be able to navigate the lending rules and make a great deal.
Different lending institutions have different policies.
If you are buying off-plan, your loan amount may go down to 50%. The mortgage market in Dubai and the UAE is well-developed so you will have plenty of opportunities to fine-tune any traditional loan package with the right research.
Like most countries, Dubai banks offer both fixed and variable-rate loans. The latter is seen as the better loan package. The biggest drawback in finding a lender to work with is that many local lenders will not lend to expats.
To these lenders, the risk is too great so they avoid it altogether. Those lenders that do work with ex-pats often require a substantial down payment before they consider the loan application.
There are traditional mortgages available in the UAE, the trick is finding a lender who is willing to work with you at reasonable rates.
This is a complicated lending structure that complies with the restrictions set down by Shariah law. This law is very strict in how loans are to be issued. The first restriction is that interest is prohibited.
The second restriction is that speculative investments are also prohibited and finally, there is an emphasis on risk sharing as well as social responsibility. It takes very well-trained legal advisors to navigate this strict lending code.
The Shariah-based lending option follows the moral and ethical principles of Islamic teachings. There are 3 forms of Shariah-based lending practices:
The minimum income level you need to have is 15,000 AED per month in order to get a loan. Then, depending on the loan amount, your down payment will either be a minimum of 20% or 35% of the total purchase price.
If the property you are buying has a purchase price of 5 million AED or less, then you will need to pay only a 20% down payment. If the property is worth more than 5 million AED, then your down payment increases to 35%
Each lender will have their own individual rules for expat lending. This is why you need to do some good research before applying for a loan. Also, reputable estate agents know the best lenders and what loan packages they offer.
Make sure to consult your estate agent on this issue. There are more regulations for ex-pats than citizens.
Like loan packages, the required documents you need to secure a loan in Dubai or the UAE vary slightly. Each bank will have its own documents that they want before they process the loan application.
The basic documents include:
The best advice that can be given is two-fold. First, make sure to do due diligence in your research. Not all lending institutions will work with expats and some will require more documentation than others.
Second, work with reputable companies only. Even though the UAE and Dubai do their best to eliminate con artists etc., there are still some around taking advantage of those expats who try to save a little money by going outside the regulated industry.
Even if it is a bit more expensive and you have more hoops to jump through, work with reputable companies only.
When you are looking to get a mortgage in Dubai or the UAE, contact our estate offices. Our estate agents are not only reputable and well-qualified but they also have the best contacts for the best loan packages available in the area.
Call us first, so we can help you avoid many of the pitfalls that can often arise when you are trying to navigate the mortgage loan world of Dubai on your own. We have over 10 years of mortgage and estate experience in Dubai.
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