Non- resident’s guide to buying a property with Non Resident Mortgage in Dubai
Many people attract towards purchasing a property in UAE maybe because of quality of life, tax-free income and more savings. If you are a non -resident and decided to settle permanently in UAE it is best to own a home in here to escape from skyrocketing rental charges.
As of now many non-residents started investing in buying villas and apartments in the UAE, as they are comfortable with this lifestyle and some people prefer tax free capital gains and few other needs tax free rental yields that can reach about 10% primarily on the smaller apartments. The changes occurred in UAE regulation recently which have further opened up UAE properties to overseas buyers and brought a significant impact on their industry.
What properties can Non-Residents Purchase in the UAE?
The UAE properties are classified into three regions namely Dubai, Abu Dhabi, and northern emirates by banks for mortgage purposes.
Abu Dhabi property
Non-GCC people like the people who not hails from Kuwait, Bahrain, UAE, Oman, Qatar and Kingdom of Saudi Arabia are eligible to get freehold and leasehold property in specific investment zones around the Abu Dhabi. The areas are Reem island, Yas Island, Al Reef Village, Raha Beach, Saadiyat Island and much more.
If you are a foreigner who is not currently living in UAE, then Dubai law states that you are capable of purchasing a freehold property in any of the twenty-three freehold areas namely Emirates Hills, Al Barsha South, Dubai Marina, Sheikh Zayed Road, Palm Jebel Ali, Palm Jumeirah and much more. where you can also get from any of the leasehold properties.
The Northern Emirates property
A non-resident can purchase both leasehold and freehold properties in Umm al Quwain, Sharjah, Ras Al Khaimah, and Ajman, where you can buy most of the property as the leasehold basis.
Can non-UAE residents get a mortgage to purchase property in UAE?
Absolutely but with some conditions, Non residents are provided rights to buy a mortgage from the UAE lenders, As per UAE mortgage cap law, a non-resident has to make at least a down payment of 25% of the property value plus the cost of purchase , Some lender may ask for 50% LTV.
The percentage of the downpayment will be increased to 35% plus the cost of purchase it property worths above AED 5 million(It is 30% for UAE nationals).
If you are supposed to take a mortgage for a second or third property, as an investment, for example, you’ll need at least 40% of the property value to cover your down payment.
Down payment requirements for non-UAE nationals (expats and non-residents)
|Property type||Property price||Maximum LTV (loan-to-value ratio)||Minimum DownPayment Required|
|First property Mortgage||Under AED 5 million||80%||20%|
|First property Mortgage||Over AED 5 million||70%||30%|
|Second, third+ property||Any price||60%||40%|
|Off-plan / under-construction property||Any price||50%||50%|
Documents needed for getting a Non-Resident Mortgage in Dubai
As documentation many banks in UAE will pull your credit report from AI Etihad credit bureau, a bank statement of last 2 years, details about your credit cards details of all liabilities including credit cards and loans etc, a whole heap of documents.
For a 50 % lending option, a scanned of your passport(to prove you do not hold a UAE visa) and your last 6 months bank statements in your home country and income proof. You will not be asked for any liability letters.
You will need to attend a mortgage offer letter signing in Dubai at some stage during the process, and this is a mandatory and at the final step of purchasing at the DLD (Dubai Land Department).
It is better to consider the additional costs involved in a property transaction such as a property valuation fee, the realtor’s commission, the land department transfer fee and a charge to register the mortgages