In the past decades, UAE has emerged as a centre of commercial and cultural activities making it an ideal country to live in. That said, now people from all across the world call UAE their home. To accommodate the growing population, UAE’s real estate market provides multiple options. Whether it is a skyscraper or a waterfront villa, expats can choose from a wide range of properties. However, purchasing a property on cash is not a feasible option for many expats. Therefore, several financial institutions in the UAE offer non-resident home loans which help expats to buy their property.
Let’s take a closer look at the home loans in UAE for expats, their conditions and the loan approval processes.
Expat Home Loan in UAE
Home loans in Dubai or other Emirates help people to achieve the milestone of buying their dream home hassle-free. However, getting loans from financial institutions is a multi-layered process which also involves multiple conditions.
For your convenience, here we have elaborated on the home loans for expats in the UAE.
Types of Home Loans
Financial institutions offer different types of home loans to the applicants, as per their eligibility and requirement. The core difference between these loans is the amount of interest charged by the bank. Therefore, the type of loan and the amount of interest decides whether the deal is favourable for you or not.
Mentioned below are the types of home loans that you can apply for.
- Fixed Rate: In fixed-rate loans, a certain percentage of interest is fixed prior to loan sanction and the borrower pays a fixed amount till the end of the loan period.
- Variable Rate: The interest rate of variable-rate loans change as per the market and other economical factors. The borrower will have to pay the interest amount on each instalment as demanded by the bank.
- Discounted Rate: In discounted rate loans, the amount of interest rate is lower than the standard during the first few months. After that period, a fixed interest rate higher than the discounted one will be charged.
- Capped: In capped-rate loans, the interest rate is variable; however, the maximum limit of interest rate that can be charged by the bank is fixed.
- Remortgage: As the name suggests, a remortgage is getting a new loan over an ongoing loan.
- Offset: In offset loans, the credit account, savings and loans are interconnected. That said, when an additional amount is deposited in any of the accounts the overall interest rate is reduced.
These are the different types of home loans for expats in the UAE. For a detailed overview of the mortgage types, read our blog on different types of home loans in Dubai or other Emirates.
Eligibility Criteria
Mentioned below are the eligibility criteria that borrowers must adhere to avoid getting loan applications denied by the bank.
- The borrower must be employed for at least six months at the current job.
- Borrowers should meet the minimum salary criteria of the bank. Generally, it is AED 15,000, but it varies from bank to bank.
- In the case of businesses, it should have been in operation for two years.
- The credit history of the borrower should be cleaned.
- The age of the borrower should cater to the limit mentioned by the bank.
Documents Required
In case the borrower met eligibility criteria, the banks will ask for the following documents.
- Income proof. For salaried individuals, it must also include the latest salary slip and salary certificate
- Passport with visa resident page (copy)
- Bank statement for the past 6 months
- Present address proof
- Trade licence (for business owners)
The documents required might vary and the bank may or may not ask additional documents from the borrowers.
Process of Getting Home Loans in UAE for Expats
The application process to acquire a home loan in the UAE is easy for borrowers. Here we have mentioned all the steps to get home loans in UAE for expats.
- Directly approach the bank or hire a mortgage broker
- Choose a suitable type of loan
- Submit all the required documents
- Receive your loan approval in writing from the bank
- Finalise a property unit and pay the down payment
- After the down payment, the bank will be responsible to pay the remaining amount
Conditions for Home Loan Approval
Aside from the above-mentioned criteria and documents, some other conditions must be catered for hassle-free loan approval.
- Insurance: Borrowers are obligated to have home insurance for loan approvals.
- Mortgage Refinancing: Mortgage refinancing is to switch to another loan when your current loan has not ended. It is legal and borrowers are allowed to do so.
- Downpayment: Generally, borrowers are required to pay at least 15% of the total amount as a down payment. This percentage can depend on multiple factors and can vary from institute to institute.
- Off-Plan Property: When buying off-plan property in the UAE, borrowers are required to pay at least 50% of the total property value. The banks only provide finance after half the payment is done.
This was all about home loans in UAE for expats along with its terms and conditions. The mortgage or home loans facilitate expats to purchase their property without financial strain. Instalments and interest rates charged by the bank are borrower-friendly making the property transaction convenient. If you are also planning to buy your own home, browse through these properties for sale in the UAE and choose from a wide range of listed properties.
Besides, if you are living in Dubai, read our blog on, mortgages for non-residents in Dubai for complete information.
Stay tuned to dubizzle’s property blog for more information on banks for home loans in the UAE.
