How To Buy Property in Dubai Without Down Payment?

Are you looking for an investment opportunity that offers a luxury high quality lifestyle and reasonable payment plans? Well, look no further. Dubai is now one of the most desirable cities to live in. There is a wide range of properties available. The best thing is that they can cater to the needs of every buyer. However, it is crucial to know your chances to buy a property without any down payment. In this article we will discuss the How to buy property in Dubai without down payments. Let’s get started:

 

Why Buy Property in Dubai?

There are a lot of advantages to living in Dubai. From the beautiful skyline of the city to tax free living, all the recreational places, the shopping attractions; the city has it all. For instance, there are no additional legal requirements for foreigners looking to invest in property. The current population of the city is over 70% of expats. Nowadays the prices of every property are in the affordable range, so you can try your luck.

Ways to Buy a Property in Dubai without Down Payment

Here is how you can cope with the down payment even if you don’t have money:

Borrow a personal loan

Personal Loan is different from Home Loan (Mortgage) as it can be taken for any need, for instance to make a down payment. Personal loans have lower credit limit compared to mortgages and have to be repaid within a maximum of about four years (though somewhat flexible). In case you manage the process on your own, it is possible to take out the personal loan at first to fund the down payment sum.

Lease purchase property alert

Occasionally, some developers or property owners offer lease to own or rent to own options. It is a process whereby part of the rent payments goes towards the ownership of the property as a form of investment. Tenants/Renters may later be allowed to buy house, using the accumulated equity to make the down payment. This is usually a very appealing method to many families who wish to own property in Dubai.

Spend your non-cash assets

There are instances where the developers or sellers may agree to accept other assets instead of cash down payment. These assets could be exchanged for a reduced financial down payment and may include valuable items, or properties in other places or even services. 

Private banking arrangement is a method that many high net worth customers apply in financing properties. The global rich, including expats, still prefer to keep their money off shore in financial centers like Switzerland or in the Channel Islands. 

It has been commonplace as interest rates have been low to borrow against stocks, shares or bonds. There is always the possibility of gaining more money than is needed to pay for the initial costs of borrowing. For instance, it acquires a low-risk investment portfolio with five to six per cent annual returns, while borrowing is well below two per cent annually.

Consider reducing the down payment 

Another possible option is to try to negotiate for a lower down payment. Most sellers or developers allow you to negotiate on the initial payment that is required to be paid. However, it is almost impossible to avoid down payment entirely. It is also important to note that some developers may have special offers that require low down payment percentages at certain times.

Property exchange

If you are an owner of a property or if you have substantial equity in another property, then you can consider the option of swapping the property with the property you wish to purchase in Dubai. This property exchange transaction will enable you to leave out the down payment of cash. For example, if you own a property in the US, for instance a rented house, and you have a job in another country, you can get a USD or AED mortgage of up to 75 per cent of the property’s value and then transfer the amount to UAE for an equivalent of a deposit. 

However, before doing this, it would be wise to consult with your bank or the lender of your mortgage since as much as it sounds convenient, some UAE banks and lenders will not accept equity release cash from a property you already own as down payment.

Developer payment plans

Some developers include favorable payment structures with elongated post-handover periods. It enables customers to pay down payments in installments in order after the completion of the property. This will assist the buyers in a way that they will manage their cash flow in a better manner. 

One of the most popular methods of buying a property with no money down is to take private financing. You can ask your friend or relative to lend it to you or approach a different lender for a separate loan. If you can secure financing for the down payment, then you can buy a house with no money down but with more liabilities to pay.

Use existing investments

You can also look at your current stock portfolio, bonds or other liquid securities to fund the down payment. Nevertheless, one should seek advice from a financial expert in order to proceed. This is because selling investments comes with tax consequences that need to be addressed.

Partnerships and joint ventures

Another possibility is to buy a home through partnerships and collaborations with other investors or people. This strategy can help minimize down payments for a particular individual and instead share the expenses between many people.

Conclusion

Do you dream of owning a property in Dubai but worried about the down payment? You don’t have to worry anymore. Some of the options mentioned above can assist in the purchase of property in Dubai without a down payment. You can also seek advice from registered real estate brokers in Dubai on these options. It will be easy to understand the legal requirements as the real estate broker can manage everything.