Many British expats living in Dubai have purchased their own property, and there are a great deal more who have considered buying a home in the city. However, circumstances change, and you may be wondering if renting out your property is allowed if you leave the UAE.
Whether you’re leaving permanently, for the long-term, or for the short-term, you can choose to rent your property out as an investment over selling it.
What Happens to Your Mortgage When You Leave the UAE?
If you are leaving the country permanently or for a substantial amount of time, you will not be allowed to leave with debt. This doesn’t mean you cannot go back to the UK without paying off your mortgage first, but you may have to convert it to a non-resident mortgage.
A non-resident mortgage is exactly how it sounds. It means you own a property and are responsible for the mortgage payments even though you do not live in Dubai or the UAE anymore.
At Expat Mortgage, we can speak to your lender to ensure a smooth transition.
How Does This Affect You?
Some banks in Dubai are fine to make a slight amendment to your mortgage, but this can be an issue for other lenders. A non-resident mortgage will come with different terms, and there’s a possibility you will have a higher interest rate as well.
If this is the case, refinancing your property through a different lender could be the best option.
Will the Bank Set a Criteria?
The most important thing for the banks of Dubai is that they do not lose their money. As long as you can prove you can keep up the payments on your non-residential mortgage, they should be satisfied.
If you consider renting out your property, you will need to check the income it creates is enough to cover your mortgage payments first. The type of property you own and the area it is in will be two of the main factors that determine your monthly rental income.
You should also make time to research the other costs of being a landlord. This can include:
- Property management fees
- Service charges
- Property maintenance
- Void periods (when you have no tenant paying rent)
Considering the costs listed above, you will need to have some money set aside as a security measure. Your lender may also be happy for you to pay your mortgage off through your salary back in the UK.
You will need to keep your UAE bank account open anyway to own a property, so you have the option of putting money into it to pay all your property fees.
How Expat Mortgage Can Help
If renting out your property is the next step for you, Expat Mortgage is by your side to help negotiate the transition between your current mortgage and a non-resident mortgage.
In the event your terms have changed drastically or your lender fixes a higher rate for your mortgage, we will talk to the bank on your behalf to see if there’s any manoeuvrability. If not, we’ll negotiate with the other banks in Dubai to refinance your mortgage at a much better rate.
We are firmly established as the go-to mortgage broker for British expats in Dubai, and we will ensure the process is as hands-off for you as possible.
For more information on how we can help, talk to a member of our team today.