Dubai emerged as a global center for luxury, business, and leisure, drawing people from all around the globe with its world-class amenities, striking skyline, and strategic location.
This cultural melting pot, with its diverse population, has fueled a continuous surge in demand for the Dubai real estate market. Non-residents are now considering investing in Dubai’s property market because of:
- Favorable taxation policies
- Reduced taxes
However, for non-residents seeking to make a real estate purchase in Dubai, the question of financing inevitably arises. That’s because it isn’t possible for everyone to pay a huge amount upfront.
Hence, one viable option to turn your dream into reality is via mortgages. But, are non-residents eligible to mortgage a property in Dubai? How should they go about it?
If you are looking for the answers, this comprehensive guide on mortgage for non-residents in Dubai.
Can You Get a Mortgage in Dubai as a Non-Resident?
Absolutely! Non-residents seeking to purchase property in Dubai, whether to secure a holiday place, residential unit or expand their real estate portfolio, have an option of obtaining a mortgage.
What’s more, several advantages come with a non-resident mortgage for investors in Dubai, including:
- Higher loan amounts
- Greater flexibility
However, it is important to note that non-resident investors have limited options for property mortgages compared to UAE citizens.
What are the Eligibility Criteria to Obtain a Mortgage for Non-Residents in Dubai?
Before embarking on the application process for a mortgage, it’s essential to verify your eligibility. Keep in mind that these criteria serve as a general reference and may differ across different banks in the UAE.
Here’s what you need to take into account:
1. Professional Criteria
To apply for a non-resident mortgage, you must either be a salaried or self-employed individual.
2. Age Restrictions
Some banks impose age restrictions. For example, Abu Dhabi Commercial Bank PJSC requires non-resident applicants to be at least 21 years old to apply for a mortgage.
3. Earning Standard
Meeting the bank’s minimum monthly income requirement is pivotal. This requirement can differ between non-residents and UAE expatriates.
Remember, this minimum income should be met post-tax deductions.
For example, Abu Dhabi Commercial Bank PJSC mandates that expatriate residents must have a minimum monthly income of 15000 AED (after tax) to qualify for their loans.
4. Approved Property List
Certain banks have a specific list of approved property developers and projects eligible for mortgage financing. Hence, ensure that your chosen property falls under the approved category prior to applying for a loan.
5. Positive Credit History
Non-residents seeking mortgage eligibility are required to maintain a good credit score. Albeit the specific criteria vary by bank, a commonly accepted standard is a credit score of 700 or higher.
6. Citizenship Requirement
You may have to be an authorized citizen of a country listed by the bank before applying for a non-resident mortgage in Dubai.
Which Documents are Necessary for Non-Residents to Apply for a Mortgage in Dubai?
To apply for a mortgage, you will have to submit specific documents as a non-resident. Remember, there can be other additional requirements that may apply based on the transaction and property terms.
Generally, non-residents applying for a mortgage in Dubai are typically asked to submit the following documents:
- A copy of the passport as proof of identity.
- Residency copy.
- Bank statements covering the last 3 to 6 months are necessary to demonstrate proof of funds.
Also, the bank may ask to provide additional documents to secure a mortgage for non-residents in Dubai. These documents may include:
- Information about any existing loans.
- Salaried individuals may have to provide pay slips or salary certificates.
- If applicable, you may need to submit tax returns.
- For self-employed individuals, submitting a trade license and audited financial statements may be necessary.
- Non-residents may have to provide evidence of their home country address, such as a utility bill or a bank statement.
- Also, non-residents need to provide property documents, including the title deed and sale and purchase agreement.
What Charges Come with Acquiring a Mortgage for Non-residents in Dubai?
When opting for a home loan as a non-resident in Dubai, there are several charges to consider. These charges may include:
1. Registration Fee of the Mortgage
The Dubai Land Department charges a fee for registering the mortgage, which amounts to 0.25% of the mortgage value.
2. Processing Fee
Lenders charge this fee for handling the mortgage application, and the amount can vary between 2500 AED to 5000 AED based on the lender.
3. Fees of the Insurance
It’s essential for non-residents to secure property and life insurance. The expense of these insurance policies will be determined by the lender and the property’s value.
4. Valuation Fee
The lender charges this fee for assessing the property, ranging from2000 AED to 5000 AED based on the value of the property.
What are the Key Aspects of Mortgages for Non-residents in Dubai?
Here’s what you need to know about the distinctive features of mortgages tailored for non-residents in Dubai.
1. Loan Limit
The extent of financial support varies depending on the chosen bank and the individual’s financial situation.
For example, Mashreq extends financing up to 10 million AED, while Abu Dhabi Commercial Bank PJSC is open to funding up to 15 million AED.
2. Interest Rates
Various banks in Dubai provide diverse interest rate options. To gain a deeper understanding, it is advisable to explore the advantages of both reduced and flat interest rates.
Nonetheless, non-resident applicants typically face slightly higher interest rates compared to expatriate residents in Dubai.
3. Duration of Loan
While resident expatriates can obtain a maximum loan duration of 25 years, non-resident investors might be subject to shorter loan terms based on their profiles.
Also, some banks may impose age restrictions, ensuring that the applicant should not exceed 65 years (salaried) or 70 years (self-employed) during the loan duration.
4. LTV (Loan-to-Value) Ratios
By the mortgage law of the UAE, non-UAE nationals must contribute a minimum down payment of 20% for first-time property buyers. It is applicable to properties valued up to 5 million AED.
Additionally, for properties exceeding 5 million AED, non-UAE nationals are required to make a 30% down payment. Nonetheless, some UAE banks limit financing to 50% of the property value for non-resident applicants.
Understanding these key features is critical for non-residents seeking mortgages in Dubai. It enables them to make informed decisions tailored to their financial goals.
Which Banks in the UAE Provide Mortgages to Non-Residents?
The following is a list of some of the banks that provide mortgages to non-residents of the UAE:
- Abu Dhabi Commercial Bank PJSC.
- First Abu Dhabi Bank.
- Mashreq.
- HSBC.
- Dubai Islamic Bank.
- Standard Chartered.
- Emirates Islamic Bank.
- Ajman Bank.
P.S. Each of these banks has its own eligibility criteria, and meeting these requirements is essential for qualifying for a mortgage in Dubai as a non-resident.
FAQs
Q: Is it easy for foreigners to obtain a mortgage in Dubai?
A: Meeting the bank’s eligibility criteria makes securing a mortgage in Dubai relatively easy. Also, it’s imperative to obtain a mortgage pre-approval letter prior to starting your property search to establish your budget in advance.
Q: Is it possible for overseas investors to opt for two mortgages in Dubai Simultaneously?
A: Certainly, you can obtain two mortgages simultaneously as an overseas investor. However, there will be specific conditions and restrictions for the second mortgage.
The Takeaway
Considering non-resident mortgages for property acquisition in Dubai is indeed a great financing option. Therefore, before proceeding with an application, it is essential to understand the process and requirements.
The best part? A mortgage can assist you at every stage of the process, offering the lowest interest rates and requiring minimal documentation from start to end.