Procedure for Getting a Home Mortgage in UAE

Home Mortgage in UAE

Procedure for Getting a Home Mortgage in UAE

Procedure for Getting a Home Mortgage in UAE

UAE is known for its transformation from oil producing industry to one of the World’s most popular real estate haven. UAE has a number of innovative architectural designed towers and buildings. The tallest building in the World, Burj Khalifa is also located in UAE city. The city has lots to offer as far as real estate industry is concerned. This includes office spaces, villas, townhouses, and apartments. UAE is a cosmopolitan city as people from different countries stays in UAE. More and more people shift to UAE because the city provides better career opportunities. As a result, there is a high demand for commercial as well as residential property among local as well as foreign expats.

Many people dream of owning a house of their own in UAE, one of the most popular cities in the world. Interest rates in UAE are quite lower as compare to other countries. Moreover, UAE Government offers a residential visa to people who want to buy a property in UAE. In addition to this, the creative designing and beautiful architectural buildings are the major features that attract foreigners to buy property in UAE. Foreign nationals were allowed to buy property in UAE only after the year 2001, before that buying property in UAE was forbidden for foreigners.

Buying property is quite a tedious task but an effective planning will help in getting things done in an organized way. Hence, it is very important to work on the procedure to be followed for buying a property. The first step in the process of buying a property is to get a pre-approval for a home mortgage.  Getting home mortgage is very important for buying a house as every buyer may not have sufficient finances which are required to buy the house. Getting a home mortgage is a not as simple as it seems. UAE being a hub for some of the best real estate buildings has several vendors who are ready to give home mortgage loans. Each and every vendor providing home mortgage UAE claims that they are offering the loan at the best home mortgage rates possible. It generates confusion in mind of the buyer as with so many options available it becomes very difficult to select the best home mortgage loan provider who will offer the loan at a very cheap home mortgage interest rate.

Limit for Home Mortgage loan

Buyer should make sure he conducts an extensive research before finalizing the home mortgage loan provider. It is important to know that the maximum home mortgage loan provided by home mortgage loan provider is 75 percent of the price of the property whose value is up to AED 5million. In case the price of the property is higher than 5 million AED than as per rules of home mortgage UAE, the buyer can get home mortgage loan up to 60%. In this category, there is no limitation as far as valuation of the property is concerned.

In cases where a buyer is a local resident or citizen of UAE than the limits for home mortgage loan are as follow:

  • In cases where the price of the property is up to 5 million AED and if its buyer’s first property than as per limits set by home mortgage UAE, the buyer can get 80% of the valuation of the house as home mortgage
  • In the case where the property value is more than 5million AED than the buyer can get 75% of the value of the house as home mortgage
  • In case it’s not the first purchase of the buyer than the home mortgage vendor can allow only 60%of value of the house as a home mortgage
  • In case of purchase of an off-plan property than a buyer can get maximum of 50% of property valuation as a home mortgage

However, as per rules for home mortgage UAE, a major factor that affects the amount of home mortgage loan is the income of the buyer. The home mortgage loan’s EMI cannot exceed more than 50% of the total income of the buyer. This includes other liabilities such as any other loan repayments or credit cards bill. Hence it is very important for a buyer that he should maintain a good credit score before applying for a home mortgage loan. A good credit score increases the chances of the approval of a home mortgage loan application. A vendor will always prefer a candidate for a home mortgage who has a higher credit score and fewer liabilities over a candidate whose account shows more liabilities as compared to his income. Hence, in case a person is having numerous credit cards than it is advisable that he should cancel some of them before applying for a home mortgage loan.

Before approaching a vendor potential candidate should conduct a thorough market research to know about the prevailing home mortgage rates. This will help the buyer in negotiations. A research should also be conducted to find a home mortgage who can give the loan at a cheap home mortgage rate.  Conducting research is a time taking process; hence hiring home mortgage consultant is always advisable. An experienced and qualified home mortgage consultant will not only conduct the research work for the buyer but will also act as a guide and will help the buyer in selecting a home mortgage vendor who can provide home mortgage at the best home mortgage rates possible.

Process for applying for home mortgage

In order to apply for a pre-approval of a home mortgage, the very first step involves submission of the authenticated documents. It is very important to organize all his documents including identity proof, bank statements etc. and submit it to the lender. The time taken by the lender to check the eligibility of the potential is up to 5-7 working days in case of employees and around 10-12 working days, in cases where the candidate applying for a home mortgage is either a businessman or self-employed.

The application gets approved by the bank or a private lender once they confirm that the candidate applying for a home mortgage is eligible and will be in a position of repaying the amount. Hiring a home mortgage consultant is quite important as the consultants are up to date as far as the information regarding any change in property law or change in interest rates is concerned. A home mortgage consultant always advise the buyer on the matters concerning with home mortgage as well as other major decisions that needs to be taken in the process of buying a house.

Buying home is a dream of every family and applying for a home mortgage helps in fulfilling that dream.  


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