Mortgage in the UAE
If we raise the question of what is more profitable – to take a mortgage credit to buy property in the UAE or rent out, then our answer will be – „to buy”. This statement is based only on dry figures. At the moment, the cost of annual rental of real estate is around 6-10% of the total property price. Thus, even if for some reason you do not have funds to cover a mortgage, you can always lease it and safely and without further problems pay the mortgage from rental money. Also, the UAE is a rapidly developing country, therefore real estate only will become more expensive over the years.
The issue of granting a mortgage in the UAE is quite provocative. Some banks fundamentally refuse to grant non-residents a loan for real estate due to domestic policy, others are more positive.
One of the main conditions for granting loans will be the applicant's working position. He or she must either work in a large international company, or have a successful business in the country. But the presence of only these factors does not give a 100% guarantee. In addition, a resident visa is required. Nevertheless, some banks provide mortgage loans to citizens of other countries, such as Great Britain, India, Saudi Arabia, Bahrain, Qatar and Kuwait. Today, the UAE legislation states that non-residents can acquire property only in Dubai, and property under construction can be purchased only by the UAE citizens.
A number of statement for obtaining a mortgage loan for the purchase of real estate in the UAE by foreign citizens
1. The applicant must be solvent;
2. Employees must provide a certificate of wages and an extract from the bank account for the last 6 months;
3. Owners of their own business must provide an audit report for the last 2 years;
4. After paying the mortgage loan, the borrower must remain at least 3,500 dirhams or 1,000 euros per family member;
5. All payments on loans should not exceed half of the income;
6. Mortgage is issued for not more than 15-20 years;
7. The borrower must be at least 21 years old and not older than 70 years at the time of full repayment of the loan;
8. Expats receive 90% of the financing from the full value of the property. Non-residents receive up to 70% of financing. The remaining amount must be paid by the borrower;
9. The average mortgage rate is from 4 to 7% per annum;
10. Regarding documents, there are no clear regulations. There is a basic package, and banks can require additional documents.
Procedure for obtaining a mortgage loan
If the borrower plans to purchase real estate and get mortgage loan, first of all it is necessary to apply to the bank and make sure that the loan will be granted to him/her. Further, specifying the type of real estate, the borrower is given 2 months to search for real estate in Dubai, which will satisfy his / her requirements. Once the investor has found his/her dream property, a contract of intent must be signed, after which a deposit should be made. After that, the borrower submits the documents to the bank, which organizes the valuation of the property. Afterwards, the bank has the right to give the final answer on granting a mortgage loan or refuse. The official application to the bank costs 1% of the property cost. If the bank refuses a loan, the amount is refunded.
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