4 April 2019

Mortgage in Dubai

As we all know Dubai is one of the most luxurious and expensive cities in the world. Dubai is well known for ultra-modern architecture, exotic and lively nightlife. Dubai has become a hotspot every day thousands of tourists come to Dubai to enjoy the rich lifestyle of Dubai.

What is the expat mortgage Dubai and how expat mortgage Dubai works?

Expat mortgage Dubai is a mortgage scheme specially created to encourage and attract all the foreigner and investors/developers to invest or buy the property of Dubai. Investor and foreigner can be a residence by buying property of Dubai. This is the main reason of attraction that expats can live there as a citizen of Dubai or can go for vacations after buying the property in Dubai.

How expat mortgage Dubai works?

Expat mortgage in Dubai used to be a difficult and stressful procedure for the developer and the foreigner. Now central bank has made easy to get an expat mortgages loan, these are the guidelines needs to be remembered when going through the expat mortgages.

1. Make a proper contract that involves the following things.

·       Their current financial situation.

·       The property they are applying for.

·       How much deposits they have available to buy the property.

·       Every information and documentation must be accurate.

2. Documentation

Expat mortgages required all the relevant documents that are mandatory for the loan process.

3. Get the Best Deal

They should find the best deal for the property and finalize it.

4. Application

In this stage, they go through application forms where application form would be filled with the help of a mortgage advisor or bank employee after that they can apply for a mortgage loan within 2 days.

5. Pre-Approval

After checking all the relevant documents carefully then expat can apply for the pre-approval which generally takes 7 working days.

6. Final offers

In this stage, they make a final loan agreement between lender and buyer which consist of all terms and condition of the mortgage loan.

7. The transfer

In this stage, the buyer and seller will receive a No objection certificate (NOC) to transfer the property between them. This whole process takes place under the Dubai Land Department.

Documents require for expat mortgages in Dubai

If developer and foreigner is a salaried employee then they need following documents for expat mortgages.

They need a passport, visa copy, and Emirates ID Copy.

They need the latest Salary Certificate issued by the employer.

They need the last 6 months of your pay slips issued by the employer.

They need the latest 6 months bank's statements showing 6 salary credits.

They need to provide all the information regarding recent Credit Card, Car Loan, Personal Loan Statements and Disclosure of all other liabilities.

If they are self-employed then they need following documents for expat mortgages.

They need a Passport, visa copy, and Emirates ID Copy.

They need a copy of all Trade License pages.

They need Audit Financial report for the last two years

They need the latest 6-month bank statement (company and personal)

They need to provide all the information regarding recent Credit Card, Car Loan, Personal Loan Statements and Disclosure of all other liabilities.

What is the maximum loan amount can be sanctioned for expat mortgages?

There is a limit for the expat mortgage

Expats can get 75% LTV (loan to value) for the property value this is applicable only AED 5 million and below the loan amount

Expats can get 65% LTV (loan to value) for the property value exceeding more than AED 5 million

This is not accurate values provided by central bank it can be varied and sometimes it does depend upon your profile.

Types of mortgage in Dubai for expats

There are many options regarding mortgage in Dubai for expats. There are more than 30 lenders and local mortgage provider in Dubai that offers a variety of mortgage. Each bank and institute has different lending criteria and guidelines to access a borrower's ability to paying back a loan amount. There is a standard law under the policy of central banks that no more than 50% of their total income should be committed to paying off their debts including all other loan and credit card etc.

In order to get a mortgage in Dubai for expats, they need to pay following fees like mortgage registration fees value of the property, Banks fees such as processing fee, valuation fee, and insurance fee and Mortgage life insurance

Expat mortgage rate

There are two types of expat mortgage rate is available in Dubai. Fixed rate and Variable rate

Fixed rate

The fixed rate will guarantee the same interest rate that would be applied for the duration of the agreement. The fixed rate is usually applied for the five years, after that, it will revert back to a rate set by the bank. The fixed rate can't be the best deal always.

Variable rate

A variable rate is an alternate option. It can cost you more or less depends on how the interest rate applies and changes. The variable rate is good when there is a chance of falling the rate but at the same time, it is bad when there is a chance of hiking the rate.

Several methods for repaying the mortgage

Capital and interest

This is the most common method of loan repayment that includes making regular payment of capital and interest over a set term.

Interest-only Payments

This method of repayment is offered only when the site or the property is under construction.

Part Repayment and Part Interest-Only Mortgages

Deposits and Down payments- The minimum deposits or down payments are required to pay for your property can vary between different banks and local mortgage provider. If foreigner or investor wants to buy a property for living then down payments can be 25-35% of the value of the property, for expatriate investor needs to pay at least 40% of the down payment.

Loan Protection Insurance

This is the mandatory requirement with all the banks and local mortgage provider.

This is the perfect time to buy property in Dubai or to invest in the property because Dubai is the only city which continuously improving their infrastructure day by day. This city has everything that tourist loves about such as Burj Khalifa, Dubai Mall, Dubai Museum, Burj Al-Arab, Dubai Aquarium, and so many cool places. 

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