How to apply for a mortgage in Dubai

mortgage in Dubai

You’ve made your mind up. You’ve decided to purchase that villa. There are two transaction options you can choose from to complete the purchase of the property. You can decide to opt for a cash investment and, although it is a more cost-effective option, it doesn’t allow the financial flexibility a mortgage does. 

Buying a property with a mortgage in Dubai allows you to maintain cash flow liquidity, whereas a cash transaction requires a substantial amount of capital that’s hard to come across. There are a few things you need to know before learning how to apply for a mortgage. Like how they work and what makes you eligible for a mortgage in Dubai. 

How does a mortgage in Dubai work? 

If you’re an expat in Dubai, you can acquire up to 80% of a mortgage loan. Naturally, the amount will be proportionate to the property purchase value, meaning that a 20% initial deposit is required to acquire the home loan. 

Property prices vary, entailing different down payments depending on the price range. For example: a property valued at a price lower than 5M dirhams demands a 20% down payment for expats and a 15% down payment for UAE nationals. Keep in mind that the higher the price, the higher the down payment, which can go up to 30% for expats and 35% for UAE nationals. 

Finally, it’s good to keep in mind the length of the process. It can take up to 10 days to acquire the mortgage approval letter from the bank. 

Who is eligible for a mortgage in Dubai?

There are certain requirements that must be met to be eligible for a home loan. You can apply for a mortgage in Dubai if you are: 

  • UAE national or resident
  • Between 21 and 65 years of age
  • Have a monthly income of AED 15K (salaried)
  • Have a monthly income of AED 25K (self-employed)

Nevertheless, these requirements may vary depending on the bank where you apply for your mortgage. Some banks have lower income requirements. 

Documents needed for a mortgage in Dubai?

You’ll need a few documents to apply for your mortgage and bring yourself a step closer to buying a property in Dubai. First, you’ll need to gather a few personal documents before submitting your application. To apply for a mortgage in Dubai, you’ll need: 

  • Visa and passport copy 
  • Salary certificate or proof of employment
  • Emirates ID 
  • Proof of residency (DEWA bill or tenancy contract) 
  • Latest credit card statement
  • Bank statements for the previous 6 months 

Make sure to gather all of the paperwork before moving forward with the application. One missing document can lengthen the processing time. 

How to process a mortgage application

First thing’s first, you’ll need to find a bank registered with the Dubai Land Department (DLD) to legally process an application for a mortgage in Dubai. You can take this task upon yourself and research about the banks that can offer a home loan at a fair rate, or you can hire a mortgage broker to help you look for the most suitable mortgage for you. 

We advise you to look for a mortgage in Dubai with the assistance of a broker. Their knowledge is invaluable and can help you obtain the best one for you. Another advantage of hiring a mortgage broker is that it saves you time from getting caught up with bank cues and meetings and can allow you to focus on finding your home instead. 

Secondly, you’ll have to choose between a fixed rate and variable rate mortgage option. What distinguishes them is quite simple. A fixed rate mortgage maintains the same interest rate throughout the repayment stage. The cost of the loan will remain the same and won’t change with any fluctuations in the market. A variable rate mortgage is characterised by how it adjusts over time with the changes in the market. Evaluate which one best suits your needs, and consider all expenses before choosing a mortgage option. 

After you’ve found a bank that offers a mortgage with a fair interest rate, you will need to process a bank pre-approval. This essentially serves as evidence that you are eligible for a mortgage in Dubai. Processing a bank pre-approval takes up to 3-5 working days. 

Lastly, you’ll have to find your dream home. Choose the property of your liking. Pre-approvals are valid from 60 to 90 days. After you’ve made your choice, you can finalise the agreement with the bank and complete the purchase of your property. 

There you have it…

Purchasing a property is an exciting milestone. The beauty about doing it in Dubai is the financial support to those seeking to become a property owner or make an investment in owning multiple properties. Looking to buy a home? We can help with that! Give us a call today, and we’ll find the property that best suits your needs and advise on how you should proceed with the purchase.

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