When you are buying a property, you don’t have to pay 100% in cash. You can opt for a mortgage in Dubai, where a bank finances up to 80% of the property’s cost. You will need a down payment, then pay the rest over up to 25 years.
Getting a mortgage is easier, whether you are a national or an expat. That said, there are certain rules. For instance, how much you can get with a mortgage, the repayment amount and schedule, eligibility, and more.
Here, we’ll go through the complete details about getting a mortgage in Dubai.
- Prepare Documents Required to Get a Mortgage in Dubai
- Learn Eligibility Criteria to Get a Mortgage in Dubai
- Understand Loan-to-Value Ratio in Dubai
- Get a Mortgage Pre-Approval
- Search the Property
- Property Valuation
- Apply for Mortgage
- Process Completion
- Fees
- FAQs
Key Takeaways
- You can obtain a mortgage in Dubai by financing up to 80% of a property’s cost with a down payment and affordable repayments over up to 25 years.
- To apply for a mortgage, you need documents like a valid passport, Emirates ID, salary certificate, and proof of debts.
- Expats must earn AED 15,000 monthly while UAE nationals need AED 10,000 to qualify for a mortgage.
- Follow these steps: prepare documents, get pre-approval, find and value the property, then apply for the mortgage.
- Don’t forget the fees: a registration fee of 0.25% and loan processing fees of 1% plus VAT apply when buying property through a mortgage.
How to Get a Mortgage in Dubai: Step-by-Step Process
You can get a mortgage in a few steps. The first step is to prepare the documents and fill out a mortgage form. The bank will review your documents and provide a pre-approval for the amount you can receive based on your eligibility. After that, you can apply for a mortgage.
1. Prepare Documents Required to Get a Mortgage in Dubai
When you are getting a pre-approval for a mortgage in Dubai, you will need the following documents:
- A valid passport, Emirates ID, or visa
- Salary certificate
- Debt details (credit card debts or loans)
You may require some extra documents. The bank will inform you about those documents if needed during the application process.
2. Learn Eligibility Criteria to Get a Mortgage in Dubai
You can get a home loan if you meet the following requirements:
- Living in the UAE
- Age between 21 and 65 years old when the loan matures
- 65 years old if salaried and 70 years old if self-employed (your company should be in operation for a minimum of three years)
- UAE nationals must have a minimum monthly income of AED 10,000
- Expats must have a minimum monthly income of AED 15,000
- Expats must be employed for three years, with a minimum of one year
3. Understand Loan-to-Value Ratio in Dubai
When you are getting a mortgage in Dubai, you will come across a term: Loan-to-Value (LTV) Ratio. In Dubai, you can get a loan up to 80% of the property value. The rest is the down payment.
For instance, if the value of the property is AED 1 million, you can obtain a home loan of up to AED 800,000, depending on your eligibility. The remaining amount is the down payment.
4. Get a Mortgage Pre-Approval
Mortgage pre-approval in Dubai confirms the borrowing budget. So, if you are looking to buy a property in Dubai, you will know your budget after pre-approval. This will help you explore the properties accordingly. Mortgage pre-approval is valid for 90 days. Also, it is free of cost.
The mortgage pre-approval process involves a full credit bureau check. However, this doesn’t affect your credit score.
5. Search the Property
After mortgage pre-approval, you can start your search for the properties for sale in Dubai, whether you are looking for an apartment or villa. Also, if you are looking to buy a property in Dubai, submit an inquiry to start the process according to your budget and preferences.
6. Property Valuation
Due diligence is important. Also, if you are applying for a mortgage, you will need a property valuation certificate. It can cost from AED 2,000 to AED 3,500. The bank or lender assesses the property value before transferring a mortgage.
7. Apply for Mortgage
After pre-approval and knowing the amount you can get from the mortgage, you will need the following documents to apply for a mortgage:
- A valid passport
- UAE residence visa and Emirates ID with copies
- Personal bank account statement for the last six months
- A salary certificate or pay slip for the last three months
- Proof of funds for the down payment
- Signed Memorandum of Understanding (MoU), also known as Form F
- Title deed of the property
If you are self-employed, you will also need these documents alongside the ones mentioned above:
- Copy of trade licence
- Audit report of the last two years
- UAE Chamber of Commerce Licence
- Share Certificate
- Memorandum and Article of Association
8. Process Completion
After you apply for the mortgage, the bank will process the mortgage amount within three to five working days. The mortgage adviser may contact you for additional documents.
9. Fees
Expect the following charges after buying a property on mortgage:
- Loan processing fees: 1% of the mortgage value + 5% VAT on fees
- Credit life insurance coverage
- Property valuation cost: AED 2500 to AED 3500 for a completed property
- DLD mortgage registration fee: 0.25% of the mortgage value
FAQs
Yes, if you are buying a property as a foreigner in Dubai, you can get a mortgage. That said, they can get an LTV ratio of up to 60% of the property’s value.
The interest rate depends upon what you have signed for: a variable or fixed rate. Fixed rates are usually for the initial loan period of 2, 3, or 5 years. For the remaining years, it switches to variable interest rates.
Yes, you will have to pay additional charges for early repayment.
These were all the details about getting a mortgage and things you need to know about a home loan before buying a property in Dubai. Also, you must learn about all the documents required to buy a property in Dubai.
Stay tuned to the DubaiSale blog to learn about the laws, tips, and market trends in Dubai’s real estate market.
