Dubai, which has become a business hub because of its strategic location, business-friendly environment and state-of-the-art infrastructure, has also become the preference of international investors wishing to invest in real estate. The one sector that has benefitted the most from the rapid economic growth of Dubai is its real estate sector. The standard of living, secure environment and the business opportunities provided by Dubai have made it a hub for real estate investments from around the world and non-resident investors buy properties in Dubai using the non-resident mortgage financial tool. Non-resident mortgage is a financial tool offered by different banks and financial institutions to help people who do not live in Dubai to buy properties in Dubai.
Dubai, being one of the most desired real estate markets in the world, provides lucrative opportunities to international investors to invest in its real estate sector, therefore for an international property investor, it is important to filter out the property of choice and to get the right non-resident mortgage deal on it. To expedite this process, the help of a local and experienced consultant is required. Whether you’re a first-time buyer or an experienced investor, professional advice can help you achieve your property goals easily in Dubai. A reputed consultant company like ’GrowBiz’ can help an international investor find the right property at the right price and can also help with understanding eligibility criteria and getting the best non-resident property mortgage deal, whether residential or commercial. We will now try to get an insight into the non-resident property mortgage system in Dubai.
Eligibility Criteria
- Age: Age is an important criterion for mortgage loans with the lower limit being 21 years, the banks usually restrict the mortgage maturity age to 65 to 70 years.
- Income: Mortgage loan applications are not entertained without proof of a stable income, it can be in the form of salary slips or business cash flow statements. Non-residents with a high and stable income are more likely to secure a non-resident mortgage easily.
- Credit History: A good credit history is very important as it ensures the banks and financial institutions the ability of the borrower to repay the mortgage loan responsibly. In the case of a non-resident borrower, the banks look at the credit history from the country of residence.
- Down Payment: In Dubai, non-residents usually pay more down payment in comparison to residents. For non-residents, the down payment is usually between 20% to 40% of the property value.
- Property Type: For commercial properties, a non-resident mortgage loan is harder to get than for residential properties as the banks in Dubai ask for a lot more details from a borrower when it comes to buying commercial properties.
- Loan-to-Value Ratio: In Dubai, the loan-to-value ratio is different for non-resident investors. It usually ranges between 60% to 80%, depending on the banks and their policies.
Application Process
- Research: The potential borrower prior to finalizing a bank should indulge in a thorough research of options provided by different banks such as interest rate, processing fees and loan repayment options.
- Documentation: All necessary documentation as required by the lender like proof of identity, property documents, income proof, credit history, etc. should be in order and updated.
- Application: The application of the loan as provided by the bank should be filled correctly and submitted along with all the required documents.
- Approval: After the approval of the loan, the bank sends a letter to the borrower outlining all the terms and conditions of the loan. If the borrower accepts the letter, the bank disburses the loan amount into the account of the borrower.
- Legal Steps: In order to avoid legal hassles, it is advisable for an investor to hire a local attorney who can review the agreements with the banks and also assist in all the other legal procedures.
- Property Purchase: To make the process of the actual purchase of the property easy, make sure that all the legal formalities are complete before paying for the property.
Benefits
- Diversification of Income: Diversification of the investor’s investment portfolio is a major advantage of buying a property in Dubai.
- Additional Income: The present-day rents of properties in Dubai account for a substantial amount in the form of rental income for any investor.
- Appreciation: Due to the continuous growth of Dubai’s real estate market, the benefit of the appreciation in the rate of property is significant over a period of time.
- Access to Dubai’s Market: Since Dubai is the business hub of the region, a lot of business opportunities can open for a property owner in Dubai. A property owner also enjoys various economic benefits in Dubai.
FAQ's
Typical loan terms include a down payment in the range of 20% to 40% and a term period in the range of 5 to 25 years.