Dubai has become a popular destination for people seeking a luxurious lifestyle in a well-developed and modern city. With its diverse population, including families looking for a better life and professionals aiming to boost their careers, the city’s real estate market is thriving. If you are a non-resident considering buying property in Dubai, this comprehensive guide will provide you with all the essential information you need to make an informed decision. Make sure to visit Aizestate.com for buying property and McHomes.ae for real estate management services.

Non-resident property Ownership in Dubai

One of the most common questions related to Dubai’s real estate market is whether non-residents can buy property in the city. The answer is yes, foreign residents, including non-resident and expatriate residents, can buy property in Dubai on a freehold basis. They have the advantage of selling, buying, and even leasing their property in Dubai. However, this is only possible in the designated zones outlined by the Dubai government, where non-residents can purchase property on a freehold basis.

Where Can Non-Residents Buy Property in Dubai?

Dubai Law states that non-residents can buy property in:

1. Leasehold properties
2. Freehold properties in one of the 23 freehold areas, including Al Barsha South, Dubai Marina, Palm Jumeirah, Emirates Hills, Palm Jebel Ali, and Sheikh Zayed Road.

Benefits of Buying Property in Dubai for Non-Residents

There are various benefits non-residents can enjoy upon buying property in Dubai. If you are still debating whether to invest in Dubai’s real estate market or not, consider the following advantages:

1. High Rental Yield for Properties: Non-residents can benefit from high rental returns on their investments in Dubai, with villa properties offering ROI of up to 6% and apartment communities having rental yields of up to 7.5%.
2. Competitive Property Prices: Compared to other major cosmopolitan cities, Dubai offers competitive prices for properties, making it the best place to buy luxurious yet affordable properties in the world.
3. Investor-Friendly Tax System: Dubai’s tax system is investor-friendly, with no taxes charged on purchased property or rental income from these purchases, allowing overseas investors to enjoy the benefits of buying property in Dubai and healthy returns on their investments.
4. Residence Visa: Foreign nationals can obtain a residence visa by investing in buying property in Dubai. The introduction of long-term visas in the UAE has made real estate investors with property worth AED 5 million eligible for a five-year residence visa, subject to meeting other essential criteria.
5. Property Management Services: Non-residents looking to purchase property in Dubai purely for investment purposes can employ property management services, such as McHomes.ae, to maintain their property and handle legalities without any hurdles.

Eligibility Criteria for Buying Properties in Dubai for Non-Residents

Non-residents need to demonstrate the following eligibility requirements for Mortgage in Dubai:

1. The minimum salary requirement should typically be at least $2,700 (AED 10,000) monthly.
2. An applicant without any debt can expect a monthly payment of up to 50% of their monthly income.
3. The applicant must be at least 21 years old.

Features of Mortgages for Non-Residents

Some of the most common features for non-residents and foreigners include:

1. Interest Rate: Interest rates depend on the bank you approach for the Mortgage in Dubai, with rates ranging from 4.5% to 6.5% per annum, based on a reduced balance.
2. Mortgage Amount: The exact amount a bank offers will be determined by your income or salary. Some banks are willing to offer up to AED 20 million for the purchase of residential properties.
3. Loan Value: Most banks offer 50% to 75% funding to non-residents.
4. Tenure: The tenure of mortgages can be for a minimum of 25 years.

Different Types of Mortgages Available to Non-Residents in Dubai

Dubai’s well-developed mortgage market offers two primary ways for non-residents to apply for a Mortgage in Dubai: either for a home in Dubai or an investment property. The deposit amount required will depend on the prevailing circumstances and the specific property type you’re interested in buying. Banks typically ask for a higher initial deposit for investment properties (40-50% of the price) since the risk is higher. In contrast, the deposit amount for homes is generally less than 25% of the initial deposit.

As a non-resident, you need to decide between a fixed-rate or variable-rate mortgage. Fixed-rate mortgages guarantee the same interest rate throughout the entire agreement duration, while variable-rate mortgages may cost more or less depending on interest rate fluctuations.

Finding the Right Mortgage in Dubai

Navigating the mortgage landscape in Dubai can be a daunting task, especially for first-time buyers and non-residents. With numerous financial institutions offering a variety of mortgage products, it’s essential to find the one that best suits your needs and circumstances. Whether you’re looking for a fixed or variable interest rate, or seeking assistance with eligibility requirements, our expert team is here to guide you through the process of securing a mortgage in Dubai. Let us help you make the right choice, ensuring a smooth and successful property investment journey in this vibrant city.

Where to Get the Loan?

Non-residents can arrange loans through a bank or a broker. If you’re unsure of your eligibility for a Mortgage in Dubai, it’s advisable to seek expert advice from an experienced and qualified broker.

Legal Documentation for a Mortgage for Non-Residents

Following the 2002 local laws amendment, foreigners and non-residents can legally buy property in Dubai and apply for a mortgage. This change led to a surge of non-residents purchasing properties in Dubai for personal use or profit through rent.

Obtaining a non-resident property mortgage in Dubai for non-residents depends on personal circumstances and property value. It usually takes a couple of weeks to arrange a mortgage in Dubai, but it’s better to obtain early approval from the bank to confirm what you are about to lend.

You will need to submit the following paperwork to the bank:

1. Copies of your passport
2. Proof of legal residence in Dubai
3. Evidence of your current residential address
4. Documents to prove mortgage affordability
5. Documents to prove creditworthiness

Step-by-Step Process of Mortgage in Dubai

To get a non-resident property mortgage in Dubai, follow these essential steps:

1. Decide if you want to consult or use a broker to choose from various mortgage options.
2. Choose the mortgage that fits your needs and find a local lawyer to assist you with the transaction process.
3. Submit the requested paperwork to the bank for finance pre-approval.
4. Find a property within your budget, agree with the seller on a fixed purchase price, and pay the advance deposits to secure your purchase.
5. Agree on a completion date according to your mortgage confirmation requirements.

Fee Structure

Arranging a mortgage in Dubai involves paying administrative and legal fees. The exact fees vary depending on the non-resident’s circumstances, but the total transaction cost can be substantial. Be prepared to pay a reasonably large deposit, and fees may include:

1. Mortgage registration fee: 0.25% of the mortgage value
2. Bank fees: Including processing fees, property valuation fees, and insurance registration fees
3. Loan protection insurance (mortgage life insurance): Usually compulsory, with costs varying depending on the property value, mortgage, and individual circumstances
4. Other costs and expenses: Depending on your situation, you might incur additional costs, such as taxes and loan arrangement fees. Buying an off-plan property could cost you up to 50% of the total cost.

Banks Providing Mortgages to Foreigners in Dubai

Almost all banks in Dubai offer mortgage products to non-residents, providing a reasonable choice of loans suitable for foreigners and non-residents. The following banks and brokers offer mortgages:

1. Global banking giant HSBC offers a decent range of Mortgage in Dubai products, best suited for non-residents and foreigners looking to invest in Dubai without actually living there. With competitive property prices and an investor-friendly tax system, Dubai is an attractive option for those interested in purchasing a property.
2. Mashreq, a UAE-based bank, offers mortgage solutions for both residents and non-residents alike. This enables foreign nationals to take advantage of the high rental yields and potentially lucrative investments in Dubai’s real estate market.
3. Another excellent choice for a wide range of mortgage and loan products is Emirates NBD. As one of the largest banks in the UAE, Emirates NBD provides comprehensive mortgage options for non-residents, catering to their specific needs and requirements.

Mortgage Affordability: How is it Calculated?

Different banks in Dubai calculate mortgage affordability using varying methods for non-resident property mortgages. However, a general rule of thumb is that only 50% of your monthly income is considered when calculating mortgage affordability.

From this 50%, the bank deducts any other credit commitments you may have, such as car loans, personal loans, and approximately 5% of all your credit card limits. This helps determine your maximum affordability for a mortgage.

Afterward, the bank conducts a stress test by applying a stress rate of interest, which can vary from 3.5% to 8%, depending on the bank. This test aims to confirm whether you would still be able to afford your mortgage repayments if interest rates were to increase to the test level.

Mortgage Terminology: Essential Terms to Know

Understanding mortgage-related terms is crucial when looking for the perfect property in Dubai. While English is widely spoken in the city, it’s essential to familiarize yourself with mortgage jargon to navigate the process more effectively.

1. Loan-to-Value (LTV) ratio: The LTV ratio is the mortgage value expressed as a percentage of the total property value. Banks in Dubai typically offer LTV ratios ranging from 50% to 75% for non-residents.
2. Repayment mortgages: With a repayment mortgage, you pay back both the interest and the capital amount borrowed over the term of the mortgage.
3. Interest-only mortgages: In interest-only mortgages, you only pay the interest accruing on the capital borrowed. The capital must be repaid in full at the end of the term.
4. Fixed-rate mortgages: In fixed-rate mortgages, the interest rate is fixed for a set period, usually one, three, or five years. After this period, the mortgage reverts to a ‘follow-on rate’ set by the bank.
5. Variable-rate mortgages: In variable-rate mortgages, the amount you pay in interest can change, as the bank can adjust the mortgage rate.

Conclusion: Dubai as a Property Investment Destination

Buying a new home can be a challenging endeavor, especially in a foreign country. However, many non-residents are purchasing properties in Dubai every year and establishing their roots in this dynamic city. Ultimately, it is a matter of personal choice and the availability of capital to decide if one is willing to start a new life in Dubai.

For those interested in buying A non-resident property in Dubai, partnering with a reputable real estate agency like Aizestate can make the process much smoother. They offer expert guidance on purchasing property in Dubai, ensuring a hassle-free experience for non-residents.

Additionally, for those who wish to invest in Dubai real estate for rental income, MCHomes provides top-notch real estate management services. They help non-residents maintain their properties and handle legalities without any hurdles, making Dubai property investments a breeze.

Contact Us

If you’re interested in exploring non-resident property mortgage options in Dubai, our team at MFI Group is here to help you every step of the way. Our experts will provide you with personalized advice and assistance to ensure a seamless mortgage application process. Don’t hesitate to reach out to us for all your non-resident mortgage needs. To learn more and get started, visit our Mortgage Struggles page and connect with our team today!