Property for sale in Dubai – financing the purchase of Dubai real estate
When you start looking at property for sale in Dubai you must obviously consider how much money you can raise and work out a budget accordingly. How to finance the purchase of Dubai real estate is another thing you must think about.
A UK mortgage might be more beneficial to you. However, when you consider alternative ways of funding the purchase of overseas properties, Dubai mortgages are another option.
Remember to include any extra costs associated with buying Dubai real estate in your budget and seek professional legal advice at all times.
Arranging finance for Dubai real estate
If you are unable to buy outright but remain determined to get your hands on a property for sale in Dubai you must think about how to finance the deal. To this end, most buyers take out a mortgage to obtain funding for Dubai real estate.
Now you face the question of which type of loan to take on properties, Dubai mortgage or UK mortgage?
Taking a mortgage secured on properties in Dubai
Taking out a Dubai mortgage to buy Dubai real estate means a maximum loan-to-value (LTV) of between 50-75%. The loan term is likely to be 15 years and the property for sale in Dubai which you are making an offer on will act as security for the mortgage.
You must remember this is a new market for properties, Dubai’s real estate sector will change considerably over the next few years and more mortgage products will become available.
As a rule of thumb, monthly income should be at least three times the monthly mortgage payment on Dubai real estate.
Buying properties in Dubai with a UK mortgage
A UK mortgage must be secured by property in the same country. Therefore, to buy a property for sale in Dubai this way you would need to release equity on your UK home.
Most lenders will allow between 75 and 96% of the value of your home to be released to allow you to buy Dubai real estate. More products and flexibility exists within the UK market.
There are also UK banks in Dubai and they have introduced more features of UK mortgages for those looking at property for sale in Dubai. There may be other advantages and conveniences to going for a lender affiliated with your bank at home.
Currency fluctuation – a risk to your home in Dubai
The risk Dubai currency issues pose to the feasibility of you being able to buy a property for sale in Dubai should not be underestimated. Dubai real estate can become a great deal more, or less, expensive in a short space of time due to currency fluctuation. This is a serious consideration when buying properties in Dubai and deciding between a UK or Dubai mortgage.
