How to Buy Property in Dubai Without Down Payment?
Are you wondering how to buy property in Dubai without a down payment? Regardless of where you live, you may have dreamt of owning a property in Dubai. But despite high hopes, not everyone can have their dream come true. This is because they may have to go through a shortage of money. This is something that holds many people back, from achieving the goal they have always dreamt about. Hence, they opt for a more suitable option i.e., mortgages in Dubai. But here again many have no idea regarding buying property in Dubai without a down payment.
What Is A Down Payment?
A down payment is an upfront payment that a buyer pays in order to own a property. At the time of the agreement, a buyer is obliged to pay a certain percentage of the total payment. This advanced payment is called a down payment. It lowers the lender’s risk and increases the equity of a buyer from the beginning of the agreement. Real estate investment in Dubai requires a down payment i.e., 20% for expats and 15% for locals.
Before worrying about how to buy property in Dubai without a down payment first you need to know about down payment. Several people want to buy a desired property by placing themselves in a decent position. Even though they can get attracted to the lavish lifestyle of Dubai, they cannot afford the resources. For this purpose, the only option that remains for them is to choose a down payment as the option.
How to Buy Property in Dubai Without Down Payment?
While buying the property many people think of ways to buy zero down payment property in Dubai. In reality, this is not possible, however, you can choose alternative methods instead. But these are applicable provided you do not have a down payment for the necessary funds.
Before considering buying property in Dubai without a down payment, you need to have an idea if it is possible or not. In reality, whether you choose a mortgage or otherwise, you should have a down payment if you want to buy property in Dubai.
The UAE Central Bank increased its LTV ratio followed by other banks in the year 2020. According to this scenario, 15% of UAE nationals and 20% of expats can buy property in Dubai. Even though the down payment has gone down, it is still relevant. However, you can still buy it with zero down payment property in Dubai. These are mentioned below:
Tips to buy property in Dubai without down payment
If you desire to buy property in Dubai without a down payment, then here are a few aspects you should consider.
- Personal loan
Are you searching for how to buy property in Dubai without a down payment? The first option to consider in that case is to acquire a personal loan. As compared to a mortgage (home loan), this is something different. You can obtain it for several reasons, including covering the issue of a down payment.
As compared to mortgages, the borrowing limit for personal loans is typically lower. In normal circumstances, you have to pay the personal loan within four years’ time. However, it depends on the type of bank and the flexibility they provide. Furthermore, you cannot take a home loan and a personal loan at the same time from the same bank. In case, you manage the procedure independently, you can cover the amount of the down payment by initially taking out a personal loan.
- Search for lease-to-own properties.
The second tip regarding how to buy property in Dubai without a down payment is to look out for lease-to-own properties. A few property owners or developers have rent-to-own or lease-to-own agreements. In this procedure, renters/tenants may later buy a home, using the down payment or accumulated equity. For several families, this approach proves effective and attractive for property buying in Dubai.
- Utilize non-cash assets
The third tip regarding how to buy property in Dubai without a down payment is utilizing non-cash assets. Sellers or developers may accept non-cash items sometimes in the form of a down payment. You can exchange these assets for a reduced down payment. These may also include different services, valuable property items, and services.
- Negotiate a lower down payment.
The fourth tip regarding buying property in Dubai without a down payment is to negotiate a lower down payment. As an option, it is possible to bring down the down payment with the help of effective negotiation. For this purpose, ask the developer or seller to cut down the requirement of initial payment while buying the property. But it is more of a challenge to zero down payment property in Dubai. A few developers may lower down payment considerably by offering special packages during particular times.
- Property Exchange
If you have either a sizeable equity position or an owner of another property then you can choose the option of property exchange. With this option, you can buy property in Dubai without a down payment. You can choose the option of buying another property by exchanging it for another property.
- Partnerships and Joint Ventures
While you may not zero down payment property in Dubai, but can reduce it considerably. By focusing on partnerships or joint ventures with other individuals or investors for purchasing a home. With this strategy, you can distribute the financial burden among many parties. Furthermore, this strategy also helps you in reducing individual down payment needs.
- Developer payment plans
You have to also consider the payment plans of the developers while thinking of zero down payment properties in Dubai. There are payment plans with extended options for post-handover offered by some developers. Once the property is completed, customers can pay installments of down payments over a longer time period.
- Use existing in vestments
The last option to consider for buying property in Dubai without a down payment is to use existing investments. These include bonds, stocks, or other liquid assets that serve as down payment. However, it is necessary to avoid proceeding any further until they have discussed it with their financial advisor. This is because there may be tax implications involved in selling the investments. So, it is better to consider carefully before moving forward.
Conclusion
Everyone desires to buy property in Dubai without a down payment. However, in reality, you cannot buy a single property if you do not pay the down payment. But if you do not have the necessary funds, you can choose alternative methods as mentioned above. As a global business hub, the demand for commercial and residential property continues to skyrocket. Contrary to the belief of zero down payment property in Dubai, you can choose easy installment. This way you will not feel the burden of upfront payment while investing in properties in Dubai.