A Guide to Buying Your First Property in the UAE
If you have made up your mind to buy a property in the UAE, you have certainly made the right decision. UAE’s real estate market boasts a wide variety of opportunities for investors as well as first-time homebuyers.
You can choose from luxurious villas to apartments and studios depending on your personal preference. However, buying a property may seem challenging especially for the first time buyers.
Here is a complete guide that can help you choose the right property and also ensure you remain safe from any pitfalls.
Types of Properties in the UAE
Before you choose any property, it is essential to explore all your options. There are tons of properties in the UAE that you can choose from. The kind of property you should settle for depends on a number of factors such as your budget, personal preference and need.
1. Apartments
There are several apartments that you can find in the UAE ranging from one bedroom apartments to 4 bedroom apartments. They have all the essential amenities such as security, gyms, and pools. Apartments typically make the best option for you if you are an individual or if you have a small family. They are affordable as well as have all the modern amenities to ensure a comfortable lifestyle.
2. Villas
Those of you who are looking for a luxurious lifestyle can opt for luxury villas. Other than lavish living, one of the main features of villas is that they offer more privacy. Most of these properties have private pools and gardens and pools. So they can be ideal for the entire family. However, compared to apartments, they are much more costly.
3. Townhouses
Townhouses are another popular kind of property that you can opt for in the UAE. They basically offer both affordability and space. They are more spacious than average apartments but at the same time they are more affordable than villas. However, they do not have the same luxury and amenities as a luxury villa.
An Overview of the UAE’s Mortgage Market
Once you decide upon the property that you want to buy, the next thing is to learn about the mortgage market and how to secure it. UAE’s mortgage market has options for residents and non-residents so you will not have much issue securing it as long as you meet the requirements. Here are some of the basic terms and conditions that you need to fulfill in order to secure a mortgage in the UAE:
1. Requirements to get a Mortgage
One of the major requirements to qualify for a mortgage in the UAE is to have a good credit hisoty and a stable income. You will have to provide the proof of your income to the bank including your tax returns, salary slips, passport, monthly income and bank statements. If you are not a resident of the UAE, you may have to provide additional documents as well.
2. LTV Ratio and Down Payment
The Loan-to-Value (LTV) ratio is the percentage of the value of the property value which the bank agrees to finance. For residents, the LTV ratio is around 80% if you are a first time buyer. For nonresidents, it is 50–70%. So that means you will have to make a down payment of 20–50%.
3. How to secure the best Mortgage Rates in the UAE
In order to have the best mortgage rate, you must explore all your options and compared between your choices. You should keep in view the fixed and variable rate mortgages in order to find out which can be the most suitable option for your need depending on your financial resources.
Tips for First-Time Buyers
Determine Your Budget
It is important to have a clear idea of your finances before you make up your mind to buy a property in the UAE. In addition to the mortgage down payment etc. you must know the other costs involved. You will have to pay 4% of the value of the property to register your property in your name with the DLD (Dubai Land Department). Both the buyer and seller have to pay this fee equally. In addition, you may have to spend money for property maintenance and service charges such as security, amenities, landscaping etc.
2. Location and Future Development Plans
Always consider the location of the property before buying one. It is best to buy an apartment or villas located at prime locations so that can you can easily access the major locations. If your home is at a prime location it means you will easily be able to access public transport, shopping areas, schools, parks or hospitals.
Consider Property Appreciation
Another important thing to consider before buying a property in the UAE is to think about its appreciation in the long run. It is always recommended to see the potential of the area and the property so that you can get the best return on investment. You should see if there are development plans in the areas such as shopping areas, metro lines etc. as they boost the value of an area and property.
Research well
If you plan to buy an off-plan property, it essential to check the reputation of the developer and track record. You should opt for the property that is being developed by well-reputed developers with proven track record.
Legal issues
Of course it is imperative to ensure that all the legal formalities are intact. You need to make sure that all documentation is conducted properly. Hiring a legal expert can be the right thing to do so that he can ensure that all the paperwork is in order.
