How to apply for a house loan in Dubai?

Currently, Dubai is one of the cities with the highest rent return on real estate investment in the world. During the epidemic, Dubai houses' annual rental ROI from 4.5% to 7%.

Not only that, Dubai also have foreigner friendly house investment policies.

 

There is no tax when you invest a Dubai house, only 4% of the house price to Dubai Land Dept.(DLD) for house registration, with no income tax, no VAT and 100% ownership and freehold property you buy.

 

Let's go through how you can get a Dubai house mortgage. 

Loan amount:

According to your income, the house loan amount that the bank is willing to provide will vary.

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Interest rate - The interest rate ranges from 3.99% to 5.5%.

The interest rate depends on the housing loan bank regulations you are applying for and the floating change of the UAE Central Bank's loan interest rate EIBOR. As the repayment amount of the loan principal increases, the interest rate will decrease.

 

Loan limit: up to 50% of the real estate valuation*.

 

If you need a loan for an existing home, you need to pay at least 50% of the property based on the bank's valuation, and the remaining 50% can be borrowed from the bank.

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Maximum loan period: 25 years, and the loan termination age is not more than 65 years old.

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*If you have a Dubai residence visa or work visa, you can borrow up to 75% of the property valuation.

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Qualifications of applicants:

Loan applicants who are not residents of the UAE must meet the following qualifications before they can apply for a Dubai home purchase loan.

• The loan applicant must be at least 21 years old.

• Must be a salaried or self-employed person.

• The monthly income must meet the minimum limit set by the lending bank, and this income must meet the minimum standard after tax deduction.

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What you need to provide:

• Loan application form.

• Passport (valid for more than 6 months), and a scanned copy of the passport from the first page to the last page is required. The reason for this is to ensure that the applicant for the loan has not lived in the UAE and does not have any outstanding loans.

• Emirates ID (if you have one).

• Bank accounts within 6 months, the salary should not less than 15,000 dirhams per month(some banks require 10,000 dirhams per month.) Under special circumstances, you can transfer money to the account online for 3 consecutive months, or deposit about AED 300,000 in your bank account for 3 consecutive months.

Workers: salary certificate and payroll

Self-employed: company financial audit report, company registration certificate, business license and business information.

• Proof of residence: housing certificate or housing lease contract issued by the company, utility bills, credit card bills, etc.

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Note: If you are not working and living in Dubai and want to purchase a real estate, you need to provide an English translation of the above materials. (Some lending institutions can provide Chinese directly, and under special circumstances, they can pay for translation)

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Loan process:

1. Buyers submit materials and apply for pre-approval.

2. The pre-approval is generally done within 7 working days after the submission of the materials, but the actual situation is that supplementary materials may be required during the pre-review period, and it usually takes about 15 working days to get the pre-approval.

3. After getting the pre-approval, determine the house and sign the loan agreement.

4. It is worth noting that the validity period of the pre-approval is generally two months. If you do not preceed the loan application in two months, the file will expire and invalid, and you need to re-approve.

5. The bank will ask the appraisal company to conduct a house appraisal and the bank will issue a loan notice after assessing the value of the property.

6. Buyers need to get a NOC letter from the developer or the seller.

7. The intermediary makes an appointment to the Housing Management Bureau for the transfer procedure.

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Documents needed for the real estate appraisal information is the following :

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• Signed loan agreement/house purchase contract (photocopy is sufficient).

• A photocopy of the first page of the landlord’s passport, a photocopy of both sides of the Emirates ID, and a photocopy of the valid visa page.

• A copy of the real estate certificate and a copy of the floor plan of the house.

The final loan notice can be obtained 5 to 7 working days after the bank assesses the property.

In Dubai, you do not necessaily need to provide any proof of income in the UAE, as long as you can provide existing domestic information.

 

According to different bank policies, the interest rate provided by the bank can be fixed or variable, and applicants can choose by themselves.

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