When thinking of purchasing property, you can either buy property in Dubai via cash or mortgage it. The latter is ideal for those on a low budget. As for home loans, you can streamline your property purchase process by getting a mortgage pre-approval.
A mortgage pre-approval confirms your eligibility for a mortgage and it is a lender’s commitment to provide you with a home loan up to a defined amount. To get pre-approved for a mortgage, make sure you meet the lender’s eligibility criteria. The checklist below guides you through a series of steps that can get you a mortgage pre-approval in Dubai.
Mortgage Pre-Approval Checklist
The following mortgage pre-approval checklist is a step-by-step guide to help you obtain mortgage pre-approval to finance your property purchases in Dubai.
1. Hire a Mortgage Broker
In Dubai, mortgages must be obtained through banks registered with the Dubai Land Department (DLD) to get a legal binding. You can employ a licensed mortgage agent to negotiate on your behalf to secure the finest mortgage loan in Dubai.
Hiring a mortgage broker can help mortgage applicants to concentrate their efforts on locating the ideal property instead of being caught up in the entire mortgage process.
You need to prepare the documents listed below to apply for a mortgage.
Documents Required for Getting a Mortgage in Dubai
To apply for a mortgage pre-approval in Dubai, you must prepare the following documents.
Documents Required for Salaried Individuals
The following documents will be required if you are a salaried individual:
- Valid Visa (for expats) and passport.
- Valid Emirates ID copy.
- Salary certificate showing employment proof.
- Bank statement and pay slips for the last 6 months.
- Disclosure of all monthly liabilities including credit card, personal loan or car loan payments.
Documents Required for Self-Employed Individuals
While if you are self-employed, then you will require these documents:
- Valid Visa (for expats) and passport.
- Valid Emirates ID copy.
- Valid Trade Licence copy.
- The last 2 year audited finances.
- Memorandum of Association (MoA) and incorporation documents.
- Disclosure of all monthly liabilities including credit card, personal loan or car loan payments.
Mortgage lenders can also request other documents if needed. In addition to the mentioned documents, the lender can ask for property-related documents such as title deed or seller agreement documents.
Eligibility Criteria for Getting Mortgage in Dubai
UAE nationals and expats are eligible for a mortgage in Dubai if they have a stable income and a good credit score. Whereas, some banks in Dubai have a list of approved employers through which they determine the eligibility of mortgage applicants.
Nevertheless, the mortgage applicant must be at least 21 years of age for being eligible for a mortgage in Dubai. Whereas, the maximum age criteria of the last repayment for many banks is:
- 70 years for UAE nationals
- 65 years for expats (up to 70 years for self-employed expats)
- 65 years for non-residents
Please note that the maximum age criteria was removed by the Central Bank in 2019. That said, many banks follow the maximum age criteria mentioned above.
Mortgage Pre-Approval Cost
The buyer should be aware of up-front costs before applying for a mortgage. It consists of the down payment, land department fees, and real estate agency commission.
Mortgage Down Payment for UAE Nationals
For properties with a price of less than AED 5 million, the minimum cash down payment requirement for UAE nationals is 15%. The minimum mortgage down payment requirement for properties worth over AED 5 million for UAE nationals is 30% of the purchase price.
For buying subsequent homes, UAE nationals must make a down payment of at least 35%.
Mortgage Down Payment for Expats
The minimum cash down payment requirement for expat residents is 20% of the purchase price of their first home if its value is less than AED 5 million. For properties with a value of over AED 5 million, expats have to make a down payment of at least 35% of the purchase price.
For buying subsequent homes, expats must make a down payment of at least 40%.
2. Choose the Ideal Mortgage Type
Mortgages in Dubai are of different types. They mostly fall under two major categories including fixed-rate and variable-rate mortgages.
You must take into account some variables while determining the best type of mortgage for your needs. These elements consist of, but are not limited to:
- Your way of living
- Your desired type of real estate
- Your required loan amount
- Your maximum affordable cash deposit
Many banks in Dubai have online mortgage pre-approval calculators. Using an online mortgage calculator, you can get an idea of your monthly instalments based on the applicable home loan.
3. Get a mortgage pre-approval letter
Obtaining a mortgage pre-approval letter is an integral step of the entire mortgage application process. A mortgage pre-approval letter is typically delivered within 3-5 business days. Whereas, you can save a significant amount of time and work if you choose ADCB Dream Home Solutions for your mortgage pre-approval.
A mortgage pre-approval letter is a formal letter from your chosen lender that confirms your eligibility for a house loan. This letter offers validation that you will be approved for a house loan and details your maximum permissible borrowing limit.
4. Find Your Desired Property
After you get your mortgage pre-approval letter you can start your property hunt stress-free. You can find many properties for sale in Dubai through the following listings:
- Houses for sale in Dubai
- Apartments for sale in Dubai
- Lands for sale in Dubai
- Commercial properties for sale in Dubai
If you are directly purchasing from any developer, a sale contract will be presented. Whereas, it is strongly advised that you use a RERA qualified real estate agent for any property purchases.
That’s a wrap-up on our guide about how to obtain a mortgage pre-approval in Dubai. Getting a mortgage pre-approval can hasten your property purchases if you have found your ideal property. In case you haven’t begun your property hunt, you can start searching from this list of properties for sale in the UAE.
Stay tuned to the UAE’s top property blog for more insights on the real estate industry.
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