A Complete Guide to Get Home Loan for Expats in the UAE

The UAE is a country of prospects and fulfilled dreams. But you can’t secure a future without a residence. You’re in luck because the UAE offers cheap and flexible home loans. This makes it easy for an expat to purchase a property. You can find all types of properties such as townhouses, villas, apartments, and more.

Below are some common questions related to buying a home loan in the UAE. You can actually buy the house of your dreams in a few simple steps! So, let’s get started. 

What is a home loan?

A home loan can be defined as a financial vessel via which a person can borrow money from the bank to purchase a property. In the Middle East, a mortgage or home loan also goes by the name of home finance. The person has to return the money back to the bank via equated monthly installments (EMIs) over a course of time on top of the particular interest. 

What is the process of getting a home loan in the UAE?

For this purpose, you should first initiate by knowing your income and the money you can repay through equated monthly installments. This can be done by utilizing the home loan calculator. It offers a simple idea. To provide more information, a bank is always available to guide. 

What are the demanded requirements to get a home loan?

One of the most crucial variables on which a home loan depends is your income. In case you are a business owner, it will depend on your yearly turnover. The banks inspect the viability to repay and can quote the time period of the loan, loan money, and the rate of interest. Search for a bank showing the lowest home loan rate. Your budget should be compatible with the bank’s offerings. 

What amount can a bank offer to get a home loan?

Although the lowest down payment ranges depending on the property cost, banks generally offer 75% of the full unit price. The remaining down payment has to be paid by you. 

What are the various categories of home loans available in the UAE?

Banks offer various types of home loans. Each home loan comes with its own rate of interest. Below is a brief breakdown of various home loans rates you can get:

1. Fixed rate of interest

This allows you to settle for an already decided rate of interest which will be a part of the equated monthly installments. A fixed-rate of interest is applicable for the whole time period on which the loan has to be returned. This is a straightforward choice and it does not get affected by the fluctuations in the market. 

2. Variable rate of interest

In this type of home loan, the rate of interest depends on the market trends. When a downward swing in the market occurs or if the regulations are altered, the rate of interest may be reduced. And vice versa when the market dynamics are up. A person can benefit from a low rate of interest but money will be lost in the opposite situation. 

3. Discounted rate of interest

The person is given a discount on a specific percentage point for a short time by the bank. However, you have to be aware of the amount you have to repay whenever the discount timeframe finishes as it might be very high. 

4. Capped rate of interest

This is another home loan where the interest rate isn’t fixed. 

However, you can decide on the maximum interest rate with the bank prior to the initiation of the loan. Even if the market fluctuates way high, it won’t influence the already decided rate. 

5. Re-mortgage or top-up

In this type of home loan, you can get a second loan while giving the equated monthly installments on a present loan. 

6. Offset mortgage

This loan allows you to link your account with a credit card and savings account. In this way, if you have some extra money, you have the option to add it to the loan account. This will be displayed in the total interest. 

What are the eligibility factors needed for a home loan?

You need to work with your current job for a minimum of 6 months. In case you’re a business owner, the business should be existing for at least 2 years. The credit history needs to be clean. You can also have a look at the detail for getting a mortgage in Dubai for residents and non-residents at LuxuryProperty.com

What are the required documents to have a home loan?

  • Salary evidence
  • Trade license in case you’re a businessman
  • Passport copy
  • Existing address evidence
  • Residency proof
  • Bank statement from the past 3 to 6 months

Should I get on with the property insurance after having a home loan?

In the Middle East, it is compulsory to get property insurance during a home loan. This acts as a safety net if you face financial loss in the future. You have the option to purchase the home loan with the insurance together or individually. 

Can I change banks during the existing home loan?

Definitely. Each day, banks are introducing competitive home loan rates in order to gain customers. If you happen to find a better deal than the present one, you can switch banks. You only have to communicate with the bank and they will guide you through the process. 

Which banks offer the ideal home loan rates?

The below banks provide the best home loan rates:

  • Emirates Islamic
  • HSBC 
  • The Commercial Bank of Dubai
  • Mashreq
  • The United Bank of Dubai

Summing it up

Lastly, let’s go over some steps which an expat has to do to have a home loan. 

Choose a property you want to purchase which is compatible with your budget.

Select a bank that is giving a low-interest rate.

Choose a rate of interest that is compatible with the budget.

Have all your documents ready. Keep an in-principle agreement from the bank.

Pay the first down payment to the developer or builder.

The bank will process your request and the loan money will be given to you. 

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