A complete guide on how to get a mortgage in Dubai
You can buy a property in Dubai in two ways – with cash or on a mortgage. Whilst a cash investment can be more cost-effective, a mortgage allows you greater flexibility in managing your finances. If you plan to buy a property, here’s how to get a mortgage in Dubai.
We have also launched an online initiative to get a home loan pre-approval in partnership with ADCB to streamline the process for prospective homeowners. If you have been searching for information on ‘mortgage Dubai’, ‘mortgage rates Dubai’, or similar topics, learn more about the ADCB Dream Home initiative and how you can get a home loan with our detailed post!
ELIGIBILITY TO GET MORTGAGE IN DUBAI
Whether you want to buy an apartment in Dubai or are more inclined towards a villa or a townhouse, you can quickly secure a home loan, given you meet the eligibility criteria. You can apply for a mortgage in Dubai if you are:
- A UAE national or resident
- Aged between 21 and 65
- Have a monthly income of AED 15K (salaried) and AED 25k (self-employed)
Note that the minimum salary for a home loan in Dubai can vary depending on the bank. Some banks allow UAE nationals with a monthly income of at least AED 10k to apply for home loans in Dubai, but it is mainly subjective to bank policies.
Non-residents can also explore mortgage options in Dubai. However, their choices are limited mainly as very few banks deal with home loans for non-resident investors in Dubai.
Please note that banks may have additional requirements for mortgage eligibility, such as a minimum period served at the current job or working for a certain set of employers.
DOCUMENTS REQUIRED TO GET A MORTGAGE IN DUBAI
Anyone who wants to buy property on a mortgage needs to first apply for one. There is paperwork required to process a mortgage application in Dubai. The requirements may vary slightly from one bank to another, but for the most part, you will need the following documents to apply for a mortgage in Dubai:
- A copy of your visa and passport
- A copy of your Emirates ID
- A salary certificate for proof of employment
- Proof of residence (copy of tenancy contract or DEWA bill)
- Pay slips and bank statements for the past six months
- The latest statements of your credit cards
If you’re a non-resident applying for a home loan in Dubai, you only need the following paperwork:
- A copy of your passport
- Your bank statements for the past three months
PROCESS TO GET A MORTGAGE IN DUBAI
Want to buy a home in Dubai with financing? Here’s the step-by-step process of getting a mortgage to finance your home purchase.
STEP 1: FIND A LENDER
In Dubai, home mortgages are sourced through banks and must be registered with the Dubai Land Department (DLD) to be legally valid. You can directly approach your bank for their available mortgage deals or hire a broker to work on your behalf to get the best mortgage loan in Dubai.
Mortgage brokers have invaluable insight, knowledge of the local market, and information about available home loans that could work for you. This allows you to focus your efforts on finding the right home instead of getting caught up in the whole mortgage process.
STEP 2: CHOOSE THE RIGHT MORTGAGE FOR YOU
There are different types of mortgages in Dubai. They mostly fall into the categories of fixed-rate and variable-rate mortgages. You need to consider several factors when deciding what type of home loan suits your circumstances. These factors include, but aren’t limited to:
- The type of property you want to buy
- The loan amount you need
- The cash deposit amount you can manage to pay
- Your income and lifestyle
Most banks have online mortgage calculators that allow you to input your variables and get an idea of their monthly instalments under the applicable home loan interest rate in Dubai.
STEP 3: GET A PRE-APPROVAL LETTER
The third and perhaps most important step in applying for a mortgage loan in Dubai is getting a pre-approval.
A Dubai mortgage pre-approval letter is an official document issued by the bank as evidence of your eligibility for obtaining housing finance. It outlines your maximum borrowing limit and offers greater certainty of obtaining a home loan.
Normally, a home loan pre-approval letter from a bank takes three to five working days. However, when you opt for the Bayut-ADCB Dream Home Solutions, the pre-approvals are instant, saving you considerable time and effort.
STEP 4: FIND YOUR DREAM HOME
Once you have the budget and the pre-approval letter, it’s time to find the perfect home. Pre-approval letters are generally valid for 60 to 90 days, depending on the lender. This gives you ample time to search for the property you wish to purchase.
Sometimes, people find their desired property first and then apply for a mortgage. This can work, but then they may not be able to secure the full amount of home finance they need to purchase the property.
STEP 5: FINALISE YOUR PROPERTY PURCHASE
After finding the property, you can contact your bank to finalise the loan agreement. The bank may assign a property evaluator to gauge the value of your desired property and help you make a reasonable offer on it.
Once you and the seller agree on a price, you can pay your deposit and decide on a completion date for the purchase transaction. On the final day of property transfer, the bank will release your loan amount to the seller – making you the property owner.
FAQS ABOUT GETTING A MORTGAGE IN DUBAI
CAN EXPATS BUY PROPERTY IN DUBAI?
Yes, expat residents can buy property in the emirate, but only in designated freehold areas in Dubai. The emirate’s law also allows for non-resident foreign property ownership in Dubai with certain conditions.
CAN YOU GET A MORTGAGE IN DUBAI AS AN EXPAT?
Yes, depending on your qualify, you can get a Dubai property mortgage.
HOW DOES A MORTGAGE WORK IN DUBAI?
When considering buying property on cash vs mortgage, it is important to keep in mind how a mortgage works in Dubai.
According to Dubai mortgage law, expats can get a home loan of up to 80% of the property purchase value. This means expats have to manage an initial deposit of 25% to buy property worth less than AED 5M in Dubai. The loan cap for off-plan property mortgages in Dubai is slightly different. Getting a mortgage in Dubai helps you maintain cash flow liquidity as opposed to a full cash purchase.
HOW MUCH DEPOSIT DO I NEED TO BUY A HOUSE IN DUBAI?
If you’re buying property on a mortgage in Dubai, the minimum cash down payment amount is determined based on the property’s purchase value and your resident status. Minimum Dubai mortgage down payment for properties worth up to AED 5m is:
- 20% for UAE nationals
- 25% for Expat residents
HOW LONG DOES THE PROCESS OF GETTING A MORTGAGE IN THE UAE USUALLY TAKE?
Obtaining the final offer mortgage letter usually takes two weeks (around 10 working days), including the time it takes to secure a pre-approval on the mortgage application.
Please note that the stated deposits apply to first-time mortgages. If you own a mortgaged property, the minimum down payment required goes up to 35% for UAE nationals and 40% for expats.
There you have it – a complete guide on how to get a mortgage in Dubai. Getting a home loan is only the beginning. Here’s how to purchase property in Dubai.
The cost of buying property in Dubai includes a few other payments, mainly fees paid to the Dubai Land Department, in addition to the purchase price.
Foreigners who wish to buy a property in Dubai should read up on the rules of foreign property ownership in the UAE to avoid complications. Looking for employment on a temporary basis first? Consider the benefits of a limited contract in the UAE.
