(Newswire.net — April 17, 2024) — You are interested in buying a property in Dubai and are worried about the minimum salary package required and confused about how much your minimum income must be to get a mortgage. Before buying a property in Dubai, more people have questions in mind about how much salary is needed to take out a loan from local banks. Are we eligible to get a loan or to invest in real estate property?
In this article, we try to give you the calculations for the minimum income to get a mortgage in Dubai to buy property. After reading this blog you will be able to decide to buy your desired property in any popular area in Dubai.
Is it beneficial to buy a property in Dubai?
Before finalizing a decision to buy a property in Dubai, many investors or homebuyers have a question in mind. Is it beneficial to buy a property in Dubai? Undoubtedly, the answer is yes. Dubai is one of the popular destinations for expats or foreigners and it has become one of the top real estate destinations in the world. The Dubai real estate market is strong enough that it gives multiple opportunities for various types of properties.
EREhomes a real estate firm in Dubai has enlisted a few features of Dubai’s real estate markets that define the benefits of buying property in Dubai:
- One of the most secure cities in the world
- Luxurious Communities
- Endless Job And Business Opportunities
- Reformed Visa Policies
- Multiple options for various types of properties
- Availability of the bundle of off-plan projects
Loan-To-Value Ratio In UAE
The loan-to-value ratio in Dubai is highly attractive and appreciated. If you ask are these values same for nationals and expatriates, the answer is “NO”. According to the Central Bank of the UAE, the loan-to-value ratio is different for UAE Nationals and expatriates. Details are mentioned below:
For UAE Nationals
For first-time property buyers, the loan-to-value ratio as per the Central Bank of the UAE is as follows:
- 85% of the actual property value: for properties valued at AED 5 million or less.
- 75% of the actual property value: for properties valued above AED 5 million.
For Expatriates
For first-time property buyers who are expatriates, the loan-to-value ratio as per the Central Bank of the UAE is as follows:
- 85% of the actual property value: for properties valued at AED 5 million or less.
- 75% of the actual property value: for properties valued above AED 5 million.
Expats or foreigners are allowed to purchase freehold properties in some designated areas in Dubai.
Additional Charges Other Than Down Payment
Aside from the down payment, some additional charges are associated with buying properties in Dubai. It is better to get ideas about these charges so that you can manage your expenses more actively and efficiently.
Here is the detail of additional costs other than down payments in purchasing property:
- 4% of the value of a property is charged by the Dubai Land Department.
- AED 4000 with 5% VAT is the Dubai Land Department Administration fee.
- AED 520 is the Title Deed Insurance Fee.
- The mortgage Registration fee will cost you around 0.25% of its value.
- AED 290 will be the mortgage Registration Admin fee.
- The actual state agency fee will be around 2% of the sale value, including 5% VAT
- Life insurance fee, which is mandatory while taking the mortgage.
- Additional charges will be imposed by the bank for processing further.
Ideal Salary Limit To Request Mortgage Loan In Dubai
The minimum salary required to request a mortgage loan in Dubai depends upon the type of property and its location. It’s a fact that buying a property in a real estate hub in Dubai is a challenging task. Planning your finances according to your requirements is critical.
In Dubai, you have multiple options for various types of properties and these properties are located in different gated communities in Dubai. So, the prices of properties vary from type to type and location to location. For instance, apartments and penthouses are smaller residential properties, on the contrary townhouses and villas are spacious properties. If we talk about the prices of the properties according to the sizes then villas are more expensive than apartments.
Similarly, if we consider the location of the property, there are some areas or communities in Dubai where property prices are high. Such as the price of a 2-bedroom apartment in Downtown Dubai is high compared to the same size apartment in Damac Hills.
We cannot define the actual salary limit but there are some eligible criteria defined by some banks in Dubai to get mortgage loans. To be eligible for a loan, most banks in Dubai require an applicant to have a salary package of between AED 15,000 and AED 20,000 per month.
Some banks also approve the loan on a salary of AED 10,000 per month.
Eligibility Criteria To Get A Mortgage In Dubai
Before getting started with the application it is necessary to know the eligibility criteria to get a mortgage in Dubai:
- There must be no blemishes on your financial and credit histories.
- There is an age limit to apply for a loan in UAE. If you are an expat, your minimum age must be 21 years old, and the maximum age limit is 65 years. For local Emiratis, the maximum age limit is 70 years.
- The minimum income required to take out a loan must be in the range between AED 15,000 to AED 20,000 per month.
- UAE nationals or residents are eligible to get a mortgage. Non-residents or expats are also eligible but they have to follow different and lengthy processes.
- Documentation is required to apply for a mortgage, you must have a clear record of the documents that are required for the application.
Final Thoughts
The process of getting a mortgage in Dubai to buy a property can be a crucial or straightforward procedure. To make this procedure easy, you need to follow the legal steps and meet the eligibility criteria. You can get a mortgage directly from banks or you can hire a broker for a proper guideline.
The minimum income criteria may vary from community to community in Dubai. For instance, to get a mortgage in Business Bay to buy an apartment the minimum salary required is AED 15,000 while the minimum income required for a mortgage to buy an apartment in Downtown Dubai is AED 20,000, and in Palm Jumeirah, it is AED 30,000.