How can you purchase real estate in the UAE on a mortgage in 2022? What are the key requirements for foreigners to get a mortgage in the UAE? How can you apply for a mortgage in Dubai if you are a non-resident of the emirate? What documents does a foreigner need to apply for a mortgage in the UAE? What are the additional costs when applying for a mortgage? Also, can one obtain a visa after purchasing a property?
As you can see, purchasing a property on a mortgage in the United Arab Emirates can be quite an involved and challenging experience. This is why we here at Emirates.Estate have collected all the necessary information regarding this in the following article.
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 purchasing a property
- Mortgage in the UAE (United Arab Emirates)
- Documents a foreigner needs in order to apply for a mortgage in the UAE
- Additional costs when applying for a mortgagee
- We will assist you in choosing and purchasing the best real estate in the United Arab Emirates!
The key requirements for foreigners when applying for a mortgage at UAE banks include:
- The person applying for a home loan must be insured. The bank will charge a fee of about 0.3% of the loan amount. In addition, the bank will also charge a fee for processing the approved loan, which will cost up to 1% of the total loan amount.
- The borrower must be of legal age. This means that at the time of signing the loan agreement in the bank of the United Arab Emirates, the borrower must be at least 21 years old.
- While the maximum age limit for taking out a mortgage is determined by banks, most often people over the age of 55 are highly unlikely to get one.
- A foreigner can get a mortgage at a rate of between 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 purchased property.
How can you apply for a mortgage in Dubai if you are a non-resident of the emirate? All banks in the UAE require that the borrower is insured. Otherwise, if you’re not then the banks will refuse to issue you a home loan.
As for any other additional requirements that non-residents might need when it comes to applying for a mortgage, this may vary from bank to bank. Nevertheless, in the below table we have taken the liberty of providing you with the requirements of the top local banks in the UAE:
|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% mortgage loan on an individual basis based upon discussion||Can issue a 65% loan on an individual basis individually, upon discussion|
|Borrowers must be between the ages of 21 and 60 years old.||Borrower's age must be between the ages of 21 to 55 years old.||Borrower's age must be between the ages of 21 to 55 years old.||Borrower's age - from 21 to 55 years|
A residence permit in the United Arab Emirates can be issued to you after you purchase a property that costs more than $270,000, on the condition that the property is not purchased on a mortgage.
In addition, you should also be aware that a residence visa does not give you the right to work in the Emirates. All non-residents need to obtain a work visa to work in the country. Moreover, prospective employers of registered companies in the UAE can also assist non-residents in getting a work visa. Conversely, an applicant who has already purchased a property in the UAE is not allowed to work in the UAE. Furthermore, they must prove that their monthly income of 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 obtain a home loan in the UAE (United Arab Emirates) for purchasing a residential property only in freehold zones. In addition, some banks have their own list of residential properties, which foreigners can purchase on a mortgage. Therefore, it is better to check with the various banks what freehold zones are available to purchase a property on a mortgage.
In order to apply for a home loan in a UAE bank, a foreigner must provide the required documents, namely:
- A mortgage application.
- A copy of the applicant's passport.
- A copy of a residence permit in the UAE.
- The latest six-month bank statement.
- 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.
So when a foreigner applies for a loan, the bank usually makes its decision within a period of three months. First, the bank must verify the applicant's creditworthiness. If after all of this the bank approves your application, they will sign a contract with you, the borrower. Following this, the borrower then makes an initial payment of at least 10% of the cost of the purchased property.
Only after this whole process, is the contract of the property 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, as long as power of attorney has been issued. Note, this does not depend on whether the property was purchased on a mortgage or not.
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 bank fee of about 0.3% of the loan amount – since the person taking out the mortgage needs to be insured in the UAE.
Find your dream home for sale in the UAE today! Visit our website Emirates.Estate and find a wide selection of only the best properties for sale in the United Arab Emirates. Our experts are ready and available not only to assist you in finding and purchasing your dream apartment but also with any necessary paperwork. So get in touch with Emirates.Estate right now because purchasing an apartment in the UAE has never been this easy or safe.