Dubai offers a wide range of properties for purchase. However, due to higher real estate prices, most people opt for a mortgage, which allows them to buy the property on loan after paying a certain amount as a downpayment. The remaining amount is paid in instalments and the property remains collateral until fully paid by the purchaser. However, it is possible to sell a mortgaged property in Dubai.
Here we have mentioned the complete process of selling mortgaged property in Dubai.
How to Sell Mortgaged Property in Dubai
If you have decided to sell your mortgaged property in Dubai, the first step is to find a buyer. dubizzle can help you find a buyer within no time. Once you have a seller, read and sign Form F (MOU) for complete information on the selling deed and the steps involved. After signing it, the following process needs to be followed.
Apply for Liability Letter and NOC
After signing Form F, sellers must acquire a liability certificate from their respective banks in Dubai that provided the mortgage. This letter will state the mortgage amount that still needs to be paid by the seller. Along with this, a No Objection Certificate (NOC) is also required from the developer. These documents will help identify the remaining costs and charges that must be paid.
Block the Property
The process of property blocking is included to protect the rights of a buyer. The process permits buyers to clear the mortgage on the property when purchasing an apartment or villa for sale in Dubai. Whereas it restricts sellers not to sell this property to any other individual. To complete this process, all the involved parties must visit the Dubai Land Department (DLD) registration office.
Here is the list of documents required for blocking a property.
- From F (MOU)
- Seller’s bank liability letter
- NOC from developer
- Title deed (copy)
- Cheque in the name of the bank (amount needs to be paid to the bank)
- Cheque to the seller (amount seller has already paid)
- 4% transfer fee to DLD in terms of cheque
- Buyer’s and seller’s original visas, passports and Emirates ID
DLD also provides options to pay through ePay, Dubai Pay and Noqodi
It is important to note that this step will be excluded if the buyer purchases property on a mortgage. The original title deed will be transferred to the bank’s name till the buyer fully pays the mortgage. The service charges included in blocking the property are mentioned below.
- AED 1000 for blocking property
- AED 10 is charged as a knowledge fee
- AED 10 is charged as an innovation fee
- AED 500 for trustee registration
Original Title Deed and Clearance Letter
After signing and paying the transfer fee to the DLD, buyers must submit their cheques to the respective bank. Once their cheques are cleared, the bank will issue a release letter and a mortgage clearance letter. After this letter, the buyer will be provided with the original deed of the property by the bank.
Transfer the Property
Buyers and sellers are required to visit the DLD office in the final step of selling mortgaged property in Dubai. In this last step, the ownership of the property is transferred from the seller to the buyer, and a new title deed is issued. The documents required for this final step are a mortgage release letter, passport, visa, Emirates ID and title deed (original).
This process is applicable when the buyer is paying in cash. If the buyer is purchasing property on a mortgage, loan approval is necessary before further proceedings. Also, the new deed will be in the name of the bank rather than any individual.
In Case of an Off-Plan Property
For selling a mortgage off-plan property, owners are recommended to contact their developer first. This is because many real-estate developers in Dubai do not sell an off-plan property until a certain percentage of the total amount is paid. These terms and conditions may vary from developer to developer.
The process of selling an off-plan property is slightly different, and additional documents are also required. Therefore, it is one of the most important aspects to consider when buying an off-plan property in Dubai.
Charges of Selling a Mortgaged Property
Different types of fees are charged to the buyers and sellers when selling a mortgaged property in Dubai. Here we have mentioned some of the major costs incurred in selling these properties.
- The seller pays an early settlement fee for sorting out their mortgage before time. The settlement fee is 1% of AED 10,000 or the outstanding amount (whichever is lesser).
- The mortgage release fee is AED 1,560 for an Islamic mortgage and AED 1,290 for a normal mortgage, including additional charges.
- Developers are also charged for issuing NOC. The fee ranges between AED 500 to AED 5000.
All of the aforementioned fees and charges are subject to change and may vary from property to property.
FAQs
How to calculate mortgage payoff when selling a home.
You can either use an online mortgage calculator or multiply the loan balance by the interest rate and divide the answer by 365.
Can you sell your house before paying off the mortgage?
Yes, Dubai real estate facilitates house owners to sell their property before paying off the mortgage completely.
What happens to my mortgage when I sell my house?
The remaining mortgage is paid off by the buyer. It depends on the buyers to either pay in cash to the bank or take a mortgage to pay off the remaining loan.
This was the complete process of selling mortgaged property in Dubai. The process may seem overwhelming, but it ensures the interest of buyers and sellers both. The mortgaged property is one of the most feasible options for purchasing a property on a limited budget. If you are interested in buying an apartment for sale in Dubai, browse through the dubizzle property portal and buy a property with convenience.
Besides, if you are confused between opting for a mortgage or paying in cash, read through our blog on mortgage Vs cash payments, which is better.
Stay tuned to dubizzle’s property blog for more information about selling a home with a mortgage in Dubai.
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