Dubai and the UAE are currently amongst the most desirable locations in the world for expats looking to settle down and start a life in a new country. Buying a property in Dubai is one of the most worthwhile investments you will ever make, not to mention one of the most exciting. However, as nothing in life, other than death and taxes, is a certainty, you’ll sometimes find that life throws us a curveball. Though you might not have any plans to leave the UAE, you never know what the future may hold, which is why it’s important to plan in advance. If you’re worried about what might happen to your mortgage if you leave Dubai, here are some useful facts.
Have an exit strategy in place
Even though you will no doubt fall in love with Dubai, and your property, the second you’re in, you never know what the future may hold. A mortgage broker will require you to have an exit strategy in place. They’ll ask you how long you plan to remain in Dubai and what you would like to do with your property if you were to leave. Why the questions? Easy. So that they can come up with the best available mortgage offer to ensure that you are able to meet its terms in a simple manner.
What could happen?
Remember, there are all manner of possibilities when it comes to leaving a mortgaged property behind in Dubai, but here are some strong possibilities:
Non-resident mortgage – In the UAE, there are a number of banks who would be more than willing to convert your existing mortgage to a non-residential mortgage. As useful as this, the main downside is the fact that, depending on the lender, you may find yourself paying more interest.
Settling up early – Again, this will all depend on the terms offered to you by your bank, but you may find that if you do decide to settle up early and pay off your mortgage early, that you find yourself hit with an early exit charge payment. In terms of how much this is, it could be anything up to a total of 3% of the outstanding value of your mortgage. This may not exactly sound fair, as essentially you are being penalized for settling a debt early, but it’s the nature of the business.
What’s the worst-case scenario?
Whilst there are a number of potential outcomes, if you want the absolute worst-case scenario, you’ll find that your bank may request that you settle the mortgage before you leave Dubai. How you settle it will be down to you. You may need to sell the property, or, pay for it out of your own pocket if you don’t wish to sell. Another bank may even buy you out. You’ll likely find though, that the banks don’t care too much about where you’re located, as long as they’re happy that you can comfortably keep up with your mortgage repayments.