Can Expats Buy OFF Plan Property on Mortgage in Dubai?


Purchasing an off plan property in Dubai has several benefits. When acquired as quickly as possible, the price is typically much lower. Off plan homes make it much easier for people with tight budgets to climb the housing ladder while allowing investors to maximize their returns. Despite its enormous popularity, financing is one component of purchasing an off plan property that most purchasers are unsure of.

Can I obtain a mortgage for an off plan property?

Yes. Absolutely, buyers of most off plan properties in Dubai can get an approval for a mortgage. Like with any mortgage, qualifying requirements must be satisfied; however, these are generally easy to fulfill and are comparable to those for a ready house.

How much cash is required to purchase an off plan property?

The amount of money you can borrow to buy an off plan property will depend on the property’s current valuation. The loan-to-value ratio is this (LTV). No matter if you’re a citizen or an expat, the LTV for all off plan properties is fixed at 50%.

Therefore, in order to be eligible for a loan if you wanted to purchase an off plan property for the current price of AED 1 million, you would first need to have AED 500,000.

If, however, you believe it will be difficult to raise 50% of the property’s value, you should not proceed in this manner. There are other development firms with more attractive offerings that entice investors and even first-time buyers.

What amount of money can I borrow for an off plan property?

The maximum loan-to-value ratio, or “LVR,” for a ready house is 80%, as the majority of buyers are well aware.

 In essence, this means that if a property is being acquired for, say, $1,000,000, the bank will only lend up to 80% of that amount, or $800,000.

The maximum loan-to-value ratio for an off plan purchase is 50%. This percentage is applicable to residents and non residents of the UAE as well as nationals of the UAE. As in the prior illustration, the bank will only lend up to 500,000 against a property valued at $1,000,000, or 50%, of the purchase price.

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Which banks will finance the purchase of an off plan property?

When purchasing an off plan property, options are slightly more limited than when purchasing a ready property where purchasers can essentially use any bank to secure financing.

 This is because not all banks provide financing for of -plan purchases, and when they do, they are picky about which projects they really fund. Generally speaking, banks would only issue mortgage loans for homes built by master developers like DP and Emaar Properties. However, they do occasionally authorize loans for projects owned by certain private developers, so everything’s not lost in those situations.

Are there any costs associated?

Off plan homes still include fees, but developers are constantly looking for ways to make the transaction more enticing in order to attract investors. Many developers offer to pay a portion of the DLD Property Registration Fee as a way to entice customers.

Developers frequently pay the entire sum, which equates to 4% of the property’s worth. By paying the charge, your developer might save you up to AED 40,000 on the AED 1 million property, as an example. To issue an Oqood certificate, which confirms the property is registered in your name, you will still need to pay RERA up to AED 5250.

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Can you obtain a mortgage while releasing equity?

You have the option to both borrow money and release equity on the home. To fully draft this agreement, though, you will require the assistance of a mortgage broker.

 You can pay the last payment owed to the developer upon handover by releasing equity and getting a mortgage. You’ll then have the money you need to invest in more real estate or pay off other obligations.

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A number of variables will affect your mortgage rate and the amount of equity that can be released. If this option appeals to you, be sure to contact Expat Mortgage so they can help you through the process.

How do you obtain approval for an off plan mortgage?

In many ways, getting authorized for a mortgage on an off plan property is similar to getting approved for a ready properties. The bank will use its standard evaluation criteria to determine whether to lend money, assuming the developer is on its list of authorized developers. The qualifying conditions will be similar to those for a ready property mortgage and may change from bank to bank.

Other than that, getting a mortgage for a property that is off the beaten path is like getting any other mortgage. Being an expat, you’ll require:

  • A passport photocopy
  • A copy of your UAE residency documentation and your present address
  • Financial records including bank statements and pay stubs

You can increase your chances of being accepted by:

  • Keeping track of your accounts
  • keeping credit card balances low
  • Requesting assistance from a mortgage broker

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