Thinking about buying a property in Dubai? A mortgage can be a smart way to spread out the cost and keep more money in your pocket. This guide will explain everything you need to know about getting a mortgage in Dubai, whether you’re a UAE citizen, expat resident or even an investor from abroad.
Eligibility Criteria
Before diving into the application process, it’s important to understand the eligibility requirements. Here’s a quick rundown:
Age: Generally, applicants must be between 21 and 65 years old.
Income: There is a minimum monthly salary requirement, typically AED 15,000 for salaried employees and AED 25,000 for self-employed applicants. Some banks may have a lower minimum for UAE nationals.
Employment Status: Most banks require a minimum period of employment with your current company, and some may have restrictions on specific employers.
Residence Status: UAE nationals and residents have the most options. Expats with residency can obtain mortgages, though options may be limited compared to nationals. Non-residents face even stricter limitations; only a few banks offer mortgages to them
It is important to check if you fit the eligibility criteria before applying for a mortgage.
Documents Required
Once you’ve confirmed your eligibility, you’ll need to gather the necessary documents to apply for a mortgage. The exact requirements may vary slightly between banks, but here’s a common list:
Proof of Identity: Passport copy and Emirates ID
Proof of Income: Salary certificate, recent payslips, and bank statements for the past 6 months.
Proof of Residence: Tenancy contract copy or DEWA bill.
Financial Statements: Latest credit card statements and any other documents requested by the bank.
Steps to Getting a Mortgage
Now that you understand the eligibility criteria and documents required, let’s take a step-by-step look at the mortgage application process:
Step 1: Find a Lender There are two main options for finding a mortgage in Dubai: (1) directly Approach Banks (this allows you to explore deals offered by various banks), or (2) work with a mortgage broker (a broker can provide valuable expertise, navigate the market for you, and potentially find you the most competitive rates).
Step 2: Choose the Right Mortgage There are different mortgage options available, with fixed and variable interest rates being the most common. Consider factors like the property type, loan amount, your down payment, income stability, and future plans when making your choice. Many banks offer online mortgage calculators to help you estimate your monthly payments.
Online mortgage calculators can be a good tool to help you estimate your monthly payments.
Step 3: Get Pre-Approved A pre-approval letter is a crucial step. This document verifies your eligibility and outlines the maximum loan amount you can qualify for. It gives you peace of mind knowing you can secure financing before searching for a property. Pre-approvals typically take 3-5 business days, though some lenders may offer instant options.
Step 4: Find Your Dream Home With your pre-approval letter in hand, you can confidently search for your ideal property. Pre-approvals are usually valid for 60-90 days, giving you ample time to find the perfect place. Tip: While some people find a property first and then apply for a mortgage, this approach can be risky if you don’t secure the desired loan amount.
Step 5: Finalize Your Property Purchase Once you’ve found your dream home, the bank will finalize the loan agreement. They may assign a property evaluator to assess the value and help you make a reasonable offer. Upon agreeing on a price with the seller, you’ll pay a deposit and set a completion date. On the final day, the bank will release the mortgage funds to the seller, finalizing the property transfer and making you the homeowner!
It is wiser to apply for a mortgage first and then find your dream property.
Additional Considerations
Down Payment: Expats typically need a minimum down payment of 25% for properties valued under AED 5 million. UAE nationals may qualify for a slightly lower minimum (20%). Remember, a higher down payment can reduce your monthly mortgage obligation.
Mortgage Costs: There are additional costs associated with getting a mortgage in Dubai, including property registration fees and Dubai Land Department (DLD) fees.
Ready to buy your dream home in Dubai?
The process may seem daunting at first, but with the right guidance, it can be a smooth and successful journey.
Our team at Nexus Properties can help you find your perfect property and navigate every step of the buying process. Contact us today for a free consultation and let us help you turn your dream of homeownership into reality.
