How to buy real estate in the UAE on a mortgage in 2020? What are the key requirements for foreigners to get a mortgage in the UAE? How to apply for a mortgage in Dubai if you are a non-resident of the emirate? Can I get a visa after buying a property? What documents does a foreigner need to apply for a mortgage in the UAE? What are the additional costs when applying for a mortgage?
Buying a property on a mortgage in the United Arab Emirates can be quite a challenging experience. Emirates.Estate has collected all the useful information a foreigner need to know when applying for a mortgage in Dubai.
TABLE OF CONTENTS
- Mortgage loan for foreigners - key requirements
- How to apply for a mortgage in Dubai if you are a non-resident of the emirate
- Getting a visa after buying a property
- Mortgage in the UAE (United Arab Emirates)
- Documents a foreigner needs to apply for a mortgage in the UAE
- Additional costs when applying for a mortgage
- We will help you choose and buy the best real estate in the United Arab Emirates!
The key requirements for applying for a mortgage at UAE banks for foreigners include:
- The life of a person applying for a home loan must be insured, and this will cost about 0.3% of the amount of the loan. In addition, the bank will charge a fee for processing the approved loan, and it will cost up to 1% of the total loan amount.
- The borrower must be of legal age, which means that at the time of signing the loan agreement in the bank of the United Arab Emirates, they must be at least 21 years old.
- The upper age limit is set by banks, but most often people over 55 are highly unlikely to get a mortgage.
- A foreigner can get a mortgage at a rate of 6.5% to 9.5% per annum.
- The mortgage period cannot be less than five years and more than 25 years.
- The loan amount cannot exceed 90% of the value of the acquired property.
How to apply for a mortgage in Dubai if you are a non-resident of the emirate? All banks in the UAE require that the borrower insures their life. Otherwise the banks will refuse to issue a home loan.
As for other requirements for applying for a mortgage for non-residents, they may vary from bank to bank. Therefore, we offer you the requirements of the top local banks in the table below:
|HSBC Bank||ADIB Bank||Bank Dubai Islamic||Mashreq Bank|
|The size of a mortgage loan for foreigners is from 5% to 60% of the property value||The size of a mortgage loan for foreigners is from 10% to 50% of the property value||Can issue a 75% loan on an individual basis individually, upon discussion||Can issue a 65% loan on an individual basis individually, upon discussion|
|Borrowers must be between 21 and 60 years old||Borrower's age - from 21 to 55 years||Borrower's age - from 21 to 55 years||Borrower's age - from 21 to 55 years|
A residence permit in the United Arab Emirates can be issued after you buy a property which costs more than $270,000 on the condition that the property is bought not on a mortgage.
You also should remember that a residence visa does not give the right to work in the Emirates. All non-residents need to obtain a work visa to work in the country. The future employer, a company registered in the UAE, assist in getting a work visa. Although an applicant who bought a property in the UAE is not allowed to work in the UAE, they must prove that their monthly income is at least $2,700 or AED 10,000.
Not every property can be purchased by non-residents on a mortgage, since, by law, foreigners can get a home loan in the UAE (United Arab Emirates) for buying a residential property only in freehold areas. In addition, some banks have their own list of residential properties, which foreigners can buy on a mortgage. Therefore, it is better to check what freehold zones are available in the banks to buy a property on a mortgage.
In order to apply for a home loan in a UAE bank, a foreigner must provide required documents, which include:
- a mortgage application;
- a copy of the applicant's passport;;
- a copy of a residence permit in the UAE;
- a bank statement for the last six months;
- a testimonial from the employer, if the applicant is an employee, as well as a salary certificate;
- registration documents of the company, its charter, certificates and an auditor's opinion on the financial position of the company if the applicant is an entrepreneur.
The bank makes its decision within three months. First, the bank must verify the applicant's solvency, and if the decision is positive, the bank will sign a contract with the borrower. After that, the debtor makes an initial payment of at least 10% of the cost of the purchased apartment.
Then the property transaction is registered at the UAE Land Department. We would like to add that the interests of both parties (the buyer and the seller) can be represented by third parties with issued powers of attorney. This does not depend on whether the property being bought on a mortgage.
When applying for a mortgage, the applicant must make the following payments:
- an initial payment of at least 10% of the cost of the purchased property;
- a bank fee for issuing a loan in the amount of one percent of the value of the property;
- a life insurance for a person taking a mortgage loan in the UAE. It costs about 0.3% of the amount of the home loan.
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