The Procedure For Applying For A Mortgage In Dubai

Planning to buy property in Dubai? You can either purchase real estate in cash or get a mortgage in Dubai. While paying for a property in cash is cost-effective, it also means consuming all your savings and spending it on buying your dream home. The other way is to get a mortgage or loan, which gives you more flexibility in managing your finances. You must make a limited investment and pay the rest in easy instalments.

Read on to learn everything about getting a mortgage or Home loan in Dubai for a property!

Who Can Qualify For a Home Loan or Mortgage in Dubai?

The eligibility criteria for buying a villa, townhouse, or apartment for sale in Dubai on a home loan or mortgage in Dubai for residents are given below:

• • You should be a citizen/ resident of the UAE.
  • The minimum age for applying for a mortgage is 21 and the maximum age is 65.
  • Your monthly income should be AED 15,000 if you are salaried (varies from bank to bank) or AED 25,000 if you are self-employed. Some banks even allow a minimum salary requirement of AED 8,000 to apply for home loan in Dubai.
  • Very few banks provide mortgages in Dubai for non-residents.
  • Some banks also ask for a minimum tenure at your current employment or consider the employers you work for.

What Documents are Required To Obtain a Mortgage in Dubai?

To apply for a home loan or mortgage in Dubai, you must submit some mandatory documents, which can vary from bank to bank. But you must keep the following documents handy when applying for a home mortgage in Dubai:

• • An application form with all your details
  • Proof of employment in the form of a salary certificate
  • Bank statements for the past six months
  • A copy of your passport, visa, and Emirates ID
  • Proof of address which can be a DEWA bill or a copy of your tenant contract or record
  • Six months of credit card statements

However, if you are a non-resident, you only need to submit the following:

• • A copy of your passport
  • Bank statement for the past three months

How To Get a Mortgage in Dubai?

You need to follow some steps to get a Mortgage or Home Loan in Dubai:

• Find a Lender

You can apply for a home loan from a bank which must also be registered with DLD (Dubai Land Department) so that it is deemed a legal contract. You can contact the bank directly or you could also contact a bank representative or a broker based in the local market. Just make sure that the middleman has valuable insight and knowledge about mortgages.

• Choose the Right Mortgage for You

Depending on fixed or variable Dubai mortgage rates, you can apply for different kinds of home loan in Dubai. When choosing the right type, you must consider the following:

• • Your lifestyle
  • The loan amount that is required
  • Type of property
  • Minimum down payment or cash deposit amount

You can use an online home loan calculator to enter variables to determine your monthly instalment amount based on popular Dubai mortgage rates.

• Get a Pre-approval Letter

It is substantial to get your pre-approval, a legal and official document that a bank issues to prove that you are eligible to receive a mortgage. It signifies the maximum amount that you are eligible to borrow. A mortgage pre-approval letter from the bank usually takes three to five business days. But with technological advancements, the pre-approval from most banks normally comes in a day.

• Find Your Dream Home

Now that you have your home loan pre-approved, you can search for the right property for yourself. This letter is valid for 60-90 days, which gives you enough time to look for the property and research all the aspects. If you apply for a mortgage after finding a property, you may get the approval, but you may not get the full home equity financing required to purchase the property.

• Finalise Your Property Purchase

Once you find the right property, you must inform the bank. Your bank can hire a real estate appraiser to assess the value of your home and the assessor will try his best to get you a good offer. When you and the property owner (seller) reach a consensus and fix the price, you can make the payment (initial deposit) and set a closing date for completing the purchase. On the last day, when the title of ownership is finally transferred in your name, the bank releases your loan amount to the seller, and you become the property’s new owner.

Mortgage in Dubai For Non Residents

Foreign investors and non-residents can buy property in Dubai and can also get a mortgage. Although non-resident investors enjoy a range of benefits when applying for a home loan, they have restricted real estate loan options compared to expats and mortgages in Dubai for residents and foreigners.

• The Eligibility Criteria

  • You need to be a citizen from the given list of countries.
  • You can be self-employed or salaried.
  • The age eligibility criteria vary. While some banks consider the same age as specified for residents of the UAE, many others consider the minimum age for applying for a mortgage in Dubai as 25.
  • You must meet the bank’s minimum monthly income after tax deductions which differs between UAE expats and non-residents.
  • Banks have an approved list of details of different kinds of projects or developers to provide the mortgage in Dubai for non-residents.

• Documents Required

Certain documents must be submitted when applying for a non-resident mortgage depending on the property purchased and the terms of the transaction. The documents required are:

• • Identify proof that can be a valid passport
  • Bank statements for the past six months
  • Tax returns and payslips, if you are employed with an organisation
  • Business licence or audited annual accounts, if you are self-employed
  • You must furnish the information about any existing loan you may have, either in the same bank or another

Mortgage in Dubai For Residents

Banks have a specified format to follow, which can provide mortgages in Dubai for expats and residents. The criteria for mortgage eligibility of residents are:

• • Duration of employment in the UAE should be a minimum of six months
  • Duration of business in the UAE should be a minimum of two to three years
  • You should have a credible credit history, and in some cases, the banks require your employer to be registered with the bank. Thus, you must be well-informed before applying for a mortgage loan in Dubai.

Mortgage Interest Rates Dubai (For Residents and Non-Residents)

Applying for home loan in Dubai is a flexible, convenient, and budgeted decision that is quite common. The current mortgage interest rates in Dubai vary between 2.99% to 5% for the purchase of properties by Dubai residents; however, they follow the regulations laid out by the central government. It also depends if the mortgage is taken on a fixed or variable interest rate. If residents opt for the fixed interest rate, it is generally set at 5%.

For non-residents, the interest rate may be higher than for expats in Dubai.

Here are some insights regarding the interest rates :

You must assess your savings and how much you can pay for the new house. If the home’s value is less than AED 5 million, then the property’s security deposit would be 25% of the price value of the property. Other charges are:

• • 4% transfer fee
  • Evaluation fee – AED 2,500 to AED 3,000
  • 2% real estate commission (can vary)

Conclusion

Getting a Home Loan or Mortgage in Dubai is a great option, especially for non-residents and expats. You must meet the eligibility criteria, submit important documents, and get your pre-approved home loan. Getting a home loan in Dubai, for both residents and non-residents, is an easy and convenient process if you meet the required criteria. Follow the information above and you can get your own home in Dubai in no time!

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