international mortgages
dubai
Essential information for buying properties in Dubai
Buying property abroad is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.
- It is of paramount importance to seek independent advice from an overseas solicitor.
- You need to ensure that you will have full title to the property on completion and that you have the appropriate documents, available for the lender.
- You should check with the estate agent and/or your lawyer that you are aware of the costs charged by legal and Government authorities for buying a Dubai property. The lender will also have their own legal costs for assigning the loan, the cost of which they will normally advise you when they issue the mortgage offer. These associated fees/taxes are typically 10% of the properties purchase price.
- Before signing the sales contract, the bank will require a copy of this document to be forwarded with the relevantapplication form. However you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is normally legally binding,
- You should ensure that the developer is registered with the land department and has a valid escrow account towards which all instalments related to the purchase of the property can be made.
Typical Costs associated with buying in Dubai:
Please be advised you need to allow approx. 10% of the property price for the additional costs;
- Mortgage loan processing fee – 0.50% - 1% of the loan value dependant on the lender.Agent’s fee – estate agents generally charge 1% - 2% of the property value to purchasers.
- Registration fee – to register the property, the Lands Department charge 1% - 1.5% of its value (depending on whether it’s a villa or an apartment)
- Property transfer fee – usually 1% - 2% charged by the developer where the purchase is from a secondary market.
- Valuation fee – dependant on property value.
- Mortgage registration fee – 1.5% - 2% of the property value, depending on the developer.
- Mortgage registration fee at Lands Department – approximately 0.25% of the loan value
Eligibility and criteria
- We arrange loans in either US Dollars or Sterling.
- Only available for villas or houses – not currently available for apartments
- Available on a Capital & Interest repayment basis only
- The maximum loan to value is 50%
- The maximum term is 15 years – available to age 70
- The minimum loan amount is $150,000/£100,000 with no maximum
- All schemes require full documentary evidence of income – ‘self-cert’ mortgages are not available.
Affordability
To qualify for a mortgage in Dubai, a calculation is used to establish whether you can afford to maintain the mortgage repayments. This will automatically happen when you complete our enquiry form and we will not charge you for this service.
For example if your net joint income is £3,000, existing UK mortgage is £500 per month, existing loan payments of £100 per month and the Dubai mortgage is £350 per month. This gives you an affordability ratio of 31.6%(£500 + £100 + £350) divided by £3,000 OR if, for example, your gross annual income is £100k per annum we will use 5 x £100k, minus any existing mortgage/other existing debts. For example, £100k per annum x 5 = £500k minus existing mortgage borrowing of £75k and no other existing debts, we could therefore lend £425k.
The amount that you can borrow is also restricted by the maximum loan to value as mentioned under Eligibility and criteria.
Proof of income requirements
If you are employed:
- Your last three month’s payslips
- Your latest P60 and employers reference
- Your last three month’s personal bank statements
If you are self-employed:
- Your last two year’s audited accounts, tax returns and accountants reference
- Your last 3 month’s personal bank statements
If you would like to speak with a representative to discuss your requirements please call +(34) 677 874 948
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