Many people are drawn to buying a home in the UAE for a variety of reasons, including the high quality of life, tax-free income, and the opportunity to save money. If you are a non-resident who wants to live in the UAE permanently and avoid paying soaring rental fees, you should take advantage of the Dubai mortgage offers offered to non-residents.
Many non-residents have begun to invest in villas and apartments in the UAE because they are comfortable with the lifestyle. Some prefer tax-free capital gains, while others require tax-free rental yields, which can reach 10% on smaller apartments. UAE property has become more accessible to international buyers as a result of recent regulatory reforms in the country.
What properties may non-residents buy in Dubai and the UAE with a mortgage?
For mortgage purposes, banks divide the UAE into three regions: Dubai, Abu Dhabi, and the northern emirates.
Abu Dhabi real estate
Non-GCC residents, such as those from Kuwait, Bahrain, the United Arab Emirates, Oman, Qatar, and the Kingdom of Saudi Arabia, are eligible to purchase the freehold and leasehold property in designated investment zones around Abu Dhabi. Reem Island, Yas Island, Al Reef Village, Raha Beach, Saadiyat Island, and other locations are among them.
Real estate in Dubai
If you are a foreigner who is not currently residing in the United Arab Emirates, Dubai law states that you can buy a freehold property in any of the twenty-three freehold areas, including Emirates Hills, Al Barsha South, Dubai Marina, Sheikh Zayed Road, Palm Jebel Ali, Palm Jumeirah, and others. You can also buy a leasehold property in any of the twenty-three leasehold areas.
Properties in the Northern Emirate
In Umm al Quwain, Sharjah, Ras Al Khaimah, and Ajman, non-residents can acquire both leasehold and freehold homes, with the majority of the property being available on a leasehold basis.
Is it possible for non-residents to obtain a mortgage in Dubai?
Non-residents do have the right to purchase a mortgage from UAE lenders, but only under certain conditions. According to UAE mortgage cap law, a non-resident must put down at least 25% of the property value plus the cost of purchase. Some lenders may require a 50% LTV.
If the property is valued at more than AED 5 million, the down payment portion will be increased to 35% plus the cost (it is 30 per cent for UAE nationals).
If you want to take out a mortgage for a second or third property as an investment, you'll need at least 40% of the property's value as a down payment.
Documents required to obtain a Dubai Non-Resident Mortgage
The documentation needed for a Dubai mortgage for a non-resident varies depending on your situation.
Many banks in the UAE will pull your credit report from the AI Etihad credit bureau or ask you to provide a credit report from your resident country, a bank statement from the previous two years, details about your credit cards, details of all liabilities including credit cards and loans, and a slew of other documents.
A scanned copy of your passport (to confirm you don't have a UAE visa) and your most recent six months' bank statements in your home country, as well as proof of income, are required for a 50% loan. No letters of obligation will be required of you.
At some point during the procedure, you'll be required to attend a mortgage offer letter signing in Dubai, which is required and occurs at the DLD (Dubai Land Department).
It is preferable to factor in other charges such as a property appraisal fee, a realtor's commission, a land department transfer fee, and a fee to register mortgages when purchasing a home.
With a proper understanding of the laws of the country and due diligence in adhering to them; it is possible to make the most of the mortgage opportunity in the country.