Mortgages for Non UAE Residents


Unlike many areas of the UK and Europe, UAE rental yields have usually returned double digit figures. The average cost to rent a 3 bedroom villa in the ranches (for example) is around 150,000 AED per annum, however a mortgage on the same property (based on maximum conditions) would equate to around 100,000 AED a yield of around 50% Gross.

The issue of late was that there was a plethora of property and due to the escalating costs of living in the Emirates there were fewer and fewer people in the affordability bracket. Couple this with a monumental off plan development strategy over the past 2 years has seen a recent correction in prices. 3 years ago the 3 bed villa in the example above would have been rented for well in excess of 200,000 AED. However, with Expo2020 looming on the horizon, the building of huge theme parks and the increase of visitors to the country year on year making it one of the top travel destinations in the world, only benefits the marketability of the country further, which will drive immigration and job creation well into the next decade.

Expats of every nationality love to diversify their property portfolios and the UAE is an outstanding opportunity for exactly that. In addition, banks in the UAE also make it easy for non-residents and expats to purchase property using a mortgage and the process is very simple.

Mortgage lending in the UAE is predominantly linked to properties that are deemed completed by the Land Department in Dubai and by specific developers in Abu Dhabi. Lending is available in almost every Emirate, subject to approval in advance, although there is no lending for Fujairah.

When looking for a mortgage in Dubai the property should be completed with a title deed, lease deed or an Oqood registered at the DLD with the completion certificate to hand. Property in Abu Dhabi can be purchased using a mortgage as long as it has been built by one of the following developers: Aldar, Sorouh, Manazel, TDIC, Bloom Gardens, Burooj Properties, Baniyas Investment & Development (Bawabt Al Sharaq) among others, check your community with us first.

There are approximately 5 lenders available to non-resident applicants, 4 of which are fairly comprehensive to use in terms of criteria and documents however they do offer higher LTVs up to 70%. One particular bank offers non-resident applicants a very pain free (borderline self cert) mortgage which entails 50% lending with an interest rate of around 4.50%, this is a tracker rate comprising of a fixed portion and the 3 month EIBOR rate (Emirates Interbank Offer Rate).

In terms of documentation most banks will require credit reports from the country of residency, 24 months bank statements, details of all liabilities including credit cards and loans etc a whole heap of documents. However, for the 50% lending option you only need a scanned copy of every page of your passport (to prove you do not hold a UAE visa) and your last 3 months bank statements showing a justifiable amount of “credits” each month to warrant the mortgage premium in full. It doesn’t matter how that income was generated only that there are credits appearing consistently over the 3 months. No liability letters, no credit check documentation and no proof of employment.

Please note that employees, self-employed persons and even those people that don’t really fit into either category (for example, people receiving passive income, rental/retirement/investment) can apply for this unique mortgage.

Non-residents can also purchase off-plan property, but unfortunately the process is painful and time consuming and the property must have been funded by more than 50% already (so in essence you will have already paid your 50% directly) as the bank will only finance the second 50% of the payment schedule. The bank will not finance any speculative gain (the premium) which is built into secondary market off plan properties, this will have to be covered by the person buying the property. Lending is not available for all “off plan” property, only those offered from specific developers. Request a free consultation about buying property in the UAE

If you are interested in purchasing a property in the UAE, whether as an investment or to live in yourself, or would like some guidance around mortgages in the UAE, we recommend that you give us a quick call to discuss the options available to you first.

UAE Refinance Mortgage

Why utilise a broker?


A mortgage is often the biggest financial commitment of a person's life. Normally we seek advice from doctors, lawyers and accountants without questioning the need for their services, why should you take a risk trying to source a mortgage by yourself without the help of a mortgage adviser. Here at Casa Capital we have access to all the leading banks in the UAE, meaning access to hundreds of mortgage products and solutions. Although most clients are very rate driven, there are many other factors that need to be taken into consideration when sourcing a mortgage.

Finding the right mortgage for Non Residents?


There are three steps to finding the right mortgage for any client:

Understand

The first step in the process is to undertake a call or meeting with you where we will conduct a full fact find to understand your requirements further.

Analyse

The second step is for us to analyse the information we have gathered in order to start filtering out the banks that are not applicable.

Recommend

Based on the information we have collected, the research we have undertaken and the analysis of the products available we will then make a recommendation.

Types of non resident mortgage available


There are an abundance of products and choices available in the UAE market. Some banks will offer discounted fees if you decide to bank with them instead of your existing bank of choice. This is known as salary transfer.

Some banks and institutions will offer the ability to make overpayments free of charge and some even allow you to exit or pay off the mortgage without cost, however no single bank does it all!

In an ideal world it would be great to have a bank offer the lowest rate, the lowest costs and charges, however where a lender appears great in one aspect it could be less appealing in another. That is why it is very important to understand all of your requirements fully before making a recommendation. There is no point in recommending a low rate that comes with mandatory salary transfer if you are unable to transfer salary due to other loan commitments as an example!

The main types of mortgage when you consider rate are as follows:

FIXED

A fixed rate mortgage is where the bank fixes the interest rate for between 1 and 5 years which protects the rate against fluctuation in the Emirates Interbank Offer Rate (EIBOR).

TRACKER

This type of rate consists of a fixed margin stipulated by the bank plus the prevailing EIBOR rate which changes daily (although most banks use a 3 month rolling average rate). If you believe rates will decline then tracker type products are normally a good option.

VARIABLE

Some banks will offer a variable rate, an internal rate which is set by various internal departments within the institution. Although variable rates are no overly transparent, they can sometimes be cheaper than fixed rates.

Why not call us for a no obligation consultation to find out more