Why you need a mortgage advisor when moving to the UAE as an expat

Whether you’ve been living in the UAE as an expat for many years or you’re new to the country, making the decision to buy a house is life-changing. Not only does it help you get your foot on the property ladder and invest in your future, but it offers reassurance, peace of mind, and a permanent base where you can raise your family and lay down concrete roots.

However, as an expat, the chances are that the UAE mortgage market baffles you. Getting to grips with the ins and outs of buying a property and finding the right product for your needs certainly isn’t impossible, but it requires many hours of research. Instead, you might want to consider the benefits of working with a specialist mortgage advisor in the UAE…

Note: if you would rather use an online broker, try this using this service.

Help you save money 

Perhaps the most obvious benefit of working with an advisor in the UAE that specialises in expat mortgages is that they’ll scour the market and find the right product for your needs. It’s true that there aren’t as many options for expats in the UAE as there are in other countries, but the market is still dynamic and requires navigation. Some even have partnerships with banks and lenders and can offer exclusive rates. A good advisor will not only look for a product that offers the lowest rates but take into account any fees that may apply as part of your mortgage product. It’s easy to be tempted in by a cheap low-interest mortgage, only to realise that you’ll need to pay over-the-odds in early repayment fees or a high product fee.

Ensure you’re eligible for the product you’re applying for

Something else to bear in mind when buying a property in the UAE is that expats must be able to demonstrate a stable income, and have a strong credit rating. Your advisor will run through all of the ins and outs of applying for a mortgage in the country and ensure you have the right financials in place to get started. Most banks in the UAE require applicants to earn at least 7,000 AED per month, though expats need to earn 10,000 AED (or around $2,700). Some banks even require expats to work for an approved employer in order to be eligible.

As well as meeting eligibility requirements, regulations state that the mortgage must be repaid every month and that an applicant’s total debt must not exceed 50% of their monthly income. Therefore, if you have other debts like loans, car finance, or credit cards, you’ll need to repay these before applying for your mortgage or factor these into your 50% monthly debt ratio. Put simply: you cannot expect to apply for a mortgage that’s beyond your means.

See also: Choosing a mortgage advisor in the UAE 

A good advisor will have a strong understanding of the local market and the requirements set by each bank. For example, some banks only allow expats to apply for a mortgage if they are of a certain nationality, or they already own a property in another country. You can explain your exacting circumstances to your advisor, and they can show you your options.

Find out if you are eligible for a UAE mortgage here.

Help you prepare for your application

If you’re buying your first property in Dubai, citizens first need to save at least a 20% deposit, provided the property is worth less than AED5 million. This figure climbs for expats to a 25% deposit for first homes, rising to 35% if the property is worth more than AED5 million. If you are not a UAE resident and don’t plan to use the property as your main home, you may need to pay a larger down payment to secure your mortgage, meaning a 50% deposit is required.

It is the job of your mortgage advisor to verify your funds before you reach the application stage to avoid rejection, so you should have proof of funds available in a UAE bank account.

If you’re buying a second property in the UAE, perhaps as an investment or to rent out, you’ll require a 40% downpayment, though this figure is reduced to 35% if you buy as a UAE national. You’ll also need a copy of your passport, an ID card, 6 months of bank statements, 24 months of business bank statements if you’re self-employed, six months of payslips, a salary certificate, and a tax return from your home country if buying as a foreign investor.

You’ll also be required to take out property insurance and a life insurance policy in order to receive a home loan. Your advisor can recommend the best products for your needs, though it is worth noting that if you choose an external provider, your bank might charge you a fee.

Help you find a mortgage that works for you

In the UAE, Sharia law means that individuals and businesses cannot profit from money lending (or charge interest), and therefore mortgages are structured differently. Banks will buy your property from the seller and sell it back to you at a profit. You’ll pay for this via monthly instalments, or let the bank lease the property back to you. Both options have their pros and cons, so speak to your advisor and they’ll recommend the right mortgage for you.

The fine print will differ with Islamic mortgages, too, which might be confusing if you’ve had a mortgage in the past. For example, banks won’t charge interest on late payments, but they will charge a fixed fee. One benefit of choosing an Islamic mortgage is that they don’t charge the same early repayment or settlement fees as traditional banks, allowing you to save. It’s worth revealing your long-term ambitions to your advisor (i.e. sell in 10 years, remortgage, rent out the property). They’ll advise on the best mortgage and institution accordingly.

They’ll chase your application

One of the biggest benefits of the UAE banking system is that mortgage applications are typically dealt with quickly. It usually takes around 5 working days for pre-approval and then another 5 working days to receive a written mortgage offer, but as with anything in life, things can be delayed, especially if your case is complicated. A good mortgage advisor will not only choose a product that you’re likely to be approved for but chase your application and speed things up without causing unnecessary delays. This will peace of mind and help you get into your new property in the UAE faster - no headaches and no endless waiting for an answer!

Profezo is the new home for trusted expat mortgage advisors. Every professional on our site has been licensed, and we won’t charge you a penny to access them. We conduct checks to ensure that all of our professionals are qualified and insured, allowing you to find the right advisor for your needs. Start your search today and get in touch if you have any questions.

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