- August 3, 2024
- Posted by: admin
- Category: Blog
UAE’s real estate market is growing each day and attracting local and foreign investors. People are trying to grab opportunities to buy apartments, houses, and villas in the UAE because of investor-friendly rules that are working in the favour of investors. Thus the growth of non-residential real estate investors is leading to the demand for home loans so that they can buy properties in the UAE at low prices. Uae’s home loan for non-resident schemes provides high loan amounts with flexible payment options. Non-resident investors in the UAE might have fewer options to get home loans than ex-pats and UAE nationals, but there still are enough options available for non-residents.
Why Invest in the UAE Real Estate Market?
Property values in the UAE are increasing rapidly, so investors are considering it a great opportunity to invest. Non-residents can quickly get a mortgage to buy or invest in real estate in the UAE. Business-friendly cities like Dubai and Abu Dhabi are becoming popular among expats. Another reason to invest in the UAE market is that nonresidents can buy off-plan property which involves buying a property before it is actually developed.
Investors usually pay a 10% deposit upfront and make additional payments at a given time period. The governments in the different Emirates come up with different rules and regulations to encourage the real estate market of the UAE. For example in Dubai, the government has created a special planning committee to balance the supply and demand for housing units. These initiatives are also attracting to buy properties in the UAE.
What are the Non-Resident Home Loan Costs and Interest Rates in the United Arab Emirates?
To secure a home loan in the UAE, non-residents need to make some payments including:
- A 25% down payment if the property costs less than AED 5 million.
- 4% transfer fee.
- The registration fee for a home loan is 0.25% of the loan amount.
- AED 2,500 and AED 3,000 as property valuation fees.
- 2% commission of real estate agent.
Interest rates for securing a home loan for non-resident can depend on the bank where you are getting a loan. Interest rates are different in different banks. However, the general range of interest rates for home loans in the UAE is between 2.5% and 4.5% per year. So you can choose different banks, compare their interest rates including terms and conditions, and make your final decision.
Terms Applied for Non-residents to Secure Home Loans in the UAE
The terms for securing home loans in the UAE as a non-resident include:
- Your country’s name should be listed in the list provided by the bank you’ve chosen to get the loan.
- You need to have a proper source of income from a job or self-employment.
- Some banks implement specific requirements like having a minimum monthly income. The specific amount of minimum income is decided by the bank and you need to meet that requirement for getting a home loan.
- Ensure that the real estate developer of your property is on the list for home loans approved by the bank.
Documents Required to Apply for the Home Loan as Non-Residents in UAE
UAE’s home loan for non-resident document requirements include:
- Passport copy for identity proof
- Residency permit
- Tax returns
- Financial statements
- Credit report
- Property details
Features of Home Loans for Non-residents in the UAE
- Maximum Loan Amount
The maximum loan amount you will get will depend on your financial situation. Different banks offer different maximum amounts. In the UAE, major banks provide up to AED 24 million as home loans for non-residents. With the UAE’s home loan for non-resident amounts, most property needs can be covered easily.
- Loan-to-Value (LTV) Ratio
In the UAE, when buying a property, banks won’t lend you the entire value of the property. For example, if you are buying a property worth AED 5 million or less, you have to cover 20% of its value by yourself, and the bank will only lend you 80% of its total worth.
For properties worth over AED 5 million, 30% of its value will be covered by you, and the remaining 70% will be lent by the bank. Some banks only lend 50% value of the property.
- Interest Rates
Interest rates in the UAE for home loans are higher for nonresidents than for the citizens of the country. These rates are different in different banks. So make sure you check the required interest rate applied for a specific time period at the bank where you are going to get the loan.
- Loan Duration
Banks in the UAE provide non-residents with a shorter time duration to pay loans than the citizens of the UAE. Non-residents often get less than 25 years to pay their loans while natives get over than 25 years to pay the amount of the loans. Also, nonresidents with a good and steady salary source must not be over 65 years old, and business people must not be more than 70 years old.
The process of getting a home loan for non-resident might be strict for non-residents who are looking for home loans to buy property in the UAE. However, by securing a loan, they can buy their dream house in the UAE and enjoy a luxurious life with the guidance of Taskmaster.
Also read:- How Business Loans in Dubai are Transforming UAE SMEs