All You Need To Know About Home Loans in UAE for Expats

This guide is for those expats who are currently living in Dubai or any other emirate in the United Arab Emirates, and this guide will help those who are thinking about buying a home there. However, for several expatriates, going through the complex processes of home loans in UAE for expats can take a big amount of period and work. In this article, we will describe the processes and methods of getting home loans in UAE for expats, we will discuss all the details from the basics to rates of interest. We will also try to answer all questions you have before diving into the process of obtaining a home loan for expats in UAE.

What are home loans or home mortgages?

A home mortgage is basically a loan given by a bank or a mortgage company for the purchase of land, property or residence. The lender from which you’re requesting a home mortgage will keep the title of the ownership of the desired house until you fully pay the debt you’re under. Once you pay off the mortgage to the lender, you will be given the title of the homeowner.

The benefit of obtaining a home mortgage is it allows more citizens to buy their own property, as the entire purchase of the house does not have to be paid upfront. However, since the lender has the title of the ownership of the house until the mortgage is active, he has all right to seize the property from the borrower and sell it in the market if the borrower can not make the payments on time.

Is there any availability of home loans in UAE for expats?

The answer to this is yes, both expat residents and non-resident foreign investors can obtain a mortgage to support their property purchases through the UAE also including Dubai.

Buying a property in a country like the United Arab Emirates is quite a dream for many. Many builders and developers are offering luxurious but affordable properties in small emirates like Ajman to enable investors and buyers to take a step and purchase those properties for a better future and profit.

GJ properties and developers have also worked in UAE for the last 10 years to ensure the residents’ safety and peace by providing affordable payment plans and less down payment. This made them one of the renowned real estate developers in UAE, their projects like Ajman Creek Towers and Bluebell Residences are on sale at low prices and promise a lot of facilities and comfort for the families.

Various types of home loans in Dubai for expats:

There are a number of different types of home loans in Dubai for expats. Let us discuss them in detail below:

1. Mortgage rate:

It is a very typical financial choice in the country. Depending on the interbank of the Emirates given rate, the lending rate is active and it consistently differs. This allows you to get less amount by sticking to the EIBOR (Emirates Interbank offer rates) regulations.

2. Fixed-rate:

As it is obvious from the name, this kind of home loan has a rate of interest set down depending on the loan amount and loan giver. Even in times of fluctuations in the market, this amount of interest can not be changed.

3. Discounted rate:

You can be eligible for the low rates of interest on your home loan in this country. These favoured conditions for home mortgages are usually limited for purchasers who are there for the first time and have rates of interest that are only simply low as compared to the specified EIBOR. It must be emphasized that this reduction is constantly used for the money giver’s base rate of interest on a home loan in the UAE.

4. Capped rate:

A capped-rate mortgage is a variable-rate loan where the interest rate is limited and cannot exceed a prearranged threshold. This makes sure that, despite likely swings in interest rates, the rate on your loan will not surpass the planned cap.

5. Offset Mortgage

An offset mortgage allows you to connect a credit card or deposit account to your loan. Choosing this arrangement can result in a more favourable interest rate for your home loan in the UAE, particularly if you have savings or other financial assets with the lender.

Moreover, these loans provide a feasible payment method, permitting you to directly fetch the amount from your joined account. It’s important to be aware that this direct transfer might be issued for a yearly fee in the UAE, and it is advisable to verify this with the loan provider beforehand.

Eligibility criteria to obtain home loans in UAE for expats:

If you are looking to apply for a home loan in UAE then the following are the criteria that you have to meet in order to get a mortgage in UAE.

• Your current job must be at least six months or a year old.
• If you own a business then your business should be working for two years minimum.
• You should have a clean credit card history on you, this is important because that will ensure how much you are trustworthy.
• If you had no credit card before then first you should think of having one and then make use of it, make sure to pay it every month before or on the due date to make a clean credit card history.

How much down payment you have to make to get a home loan:

Whenever you are applying for loans in banks or mortgage agencies, you have to pay a down payment of 15% in most cases. This money you pay will ensure the lender that you are capable of covering your future costs.

Tips for applying for home loans for expats in UAE:

Research Loan Options: Explore and research various loan products, knowing their interest rates, repayment periods, and related expenses.

1.   Select the Right Property: Always choose a property that goes with your finances and meets the lender’s criteria.
2.   Compile important Documentation: Draft all mandatory documents, including evidence of income, employment stability, nationality and identification.
3.   Save money for the down payment: Save a substantial amount for the down payment as it will enhance your loan application and also decrease the loan amount.
4.   Obtain Pre-Approval: Get pre-approval before house hunting to demonstrate your seriousness and clarify your budget.
5.   Consult with Experts: Seek advice from financial experts or mortgage advisors to steer the complications of the procedure.
6.   Compare Multiple Lenders: As you are spending your money on something you must compare loan offerings from different banks to confirm the most profitable duration for your home loan.

What documents are required for applying for a loan in Dubai as an expat:

Following is the list of the documents you need to prepare before going to ask for a home loan for expats in the UAE:

1. Copy of your passport.
2. Personal details (name, contact number, email id)
3. Educational details
4. Details of the property you are buying from that loan.
5. A bank statement for the last three or six months
6. Any proof of the salary you are earning.
7. A convincing proof that you are living in UAE.
8. A proof of the place you are currently living in (your current address)
9. If you are a business owner then you need to prepare a trade license as well.

What process should you follow to apply for a home loan in UAE:

The application process for getting a housing loan in the UAE is a piece of cake if you follow the below steps:

1. Choose whether to deal with a bank directly or indirectly through a broker.
2. Pick the mortgage option that goes well for you.
3. Get a mortgage agreement in principle or a form of letter that shows their acceptance.
4. Search for the unit you want and reach the optimum deal.
5. Upon settling on a price, make sure to pay the placement to confirm the purchase and the completion date.
6.   The bank or loan lender will pay the amount by the completion date.

Which bank in the UAE gives the best rates In mortgages:

You need to be extra careful while choosing a bank for your mortgage loan. Since this is a long-term relationship you must choose a bank which takes care of your requirements. Most people choose those banks to get a loan that they use for other financial dealings, even though it can be beneficial for you to choose your usual bank, it is advised to check out other banks as well in terms of mortgage rates.

Some of the best banks you should consider are:

Mashreq Bank:

It is one of the most successful and leading banks in the United Arab Emirates, this bank offers several niche mortgage plans for people who want to apply for home loans.

HSBC:

It is the world’s largest banking service, this UK bank offers a mortgage plan depending on your property value.

The Commercial Bank of Dubai ( CBD):

Commercial Bank of Dubai is a UAE banking and financial services corporation headquartered in Deira, Dubai. It also has many mortgage plans you can look for.

The United Arab Bank:

This bank caters for the needs of retail, corporate and investment banking clients.

Read More: How To Make MOU For Property In Ajman?

Conclusion:

This guide was for those people who want to buy a house in a land like UAE and want to clutch every opportunity they have to settle in UAE. This guide settles people’s queries about getting home loans for UAE expats.