Various financial options are open to overseas buyers in the UAE. Below is an overview of the investment finance currently available.
Financing your purchase in the UAE could entail injecting some of your own funds or, as most investors prefer, a mortgage or equity release scheme.
Mortgages are now widely available from most banks and some financial institutions in the UAE, with interest rates currently at 6% from HSBC. You can borrow for property purchase or buy-to-let investment and the lending criteria will vary from one lender to another. In general, purchasers can expect to get 80% mortgage on the value of the property if they are residents and 70% if they are non-residents. The mortgage term can run for 20 years, but must be paid by your 60th birthday.
Borrowers must select between conventional mortgages and Islamic mortgages. 70% of Islamic mortgages are, interestingly enough, granted to non-Muslims who benefit from the fact that there is no charge for early repayment of the loan.
Off-plan developments in the UAE offer installment plans over between 12 to 60 months. The charges applicable vary according to developer and repayments are usually index linked. The developer can sometimes offer the most competitive finance options and these are certainly worth considering in conjunction with mortgage alternatives.
As always, before making a commitment, we recommend you discuss your investment strategy with a lawyer, a reputable property agent with experience in the area and even a financial advisor.
Equity release is simply a way of releasing some cash from the home without having to sell up and move house. If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who will assist you in raising the necessary finance for your investment property in the UAE.
If you are in your mid-50s or older and own your own home, you may be able to get a cash lump sum, a regular income, or both, by using an equity release scheme based on the value of your property. These schemes can be helpful in certain circumstances to raise money for a mortgage to finance your investment property in the UAE.
To learn more about financing your investment property in the UAE in this way, please visit our equity release section.
Not everybody falls into a category and some investors will need to raise alternative finance to equity release or mortgage options. There are a number of other borrowing facilities available to investors of property in UAE and our advisors will gladly put you in touch with professionals who can help.
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