Home Loans Dubai

“There is something permanent and something extremely profound in owning a home

– Kenny Guinn”

Yes, having your own home is something every human being dreams about in life. When you have one of your own, it is considered a valuable asset as its value increases with time. Once you reach a particular level in your career, you might want to purchase your own home. Buying a property is one of the most important financial decisions you make in life and most often, you require a mortgage to get one.

What is a mortgage?

Mortgage is a loan that you get from a financial institution, usually a bank, to enable you to purchase or construct a new house or renovate your existing building. By availing yourself of a home loan in Dubai, you are taking the very first step towards acquiring your own asset that is going to fetch you many times its original value later on in life. 

This is the present scenario in Dubai where the real estate market is undergoing tremendous appreciation and it only makes sense to acquire a home loan that will get you a solid asset as well as a great investment in something that will give you greater returns in future.

In order to understand your eligibility for a mortgage loan, monthly installments and the various fees you will have to pay before getting the loan sanctioned, you need to know about the mortgage calculator that gives you these details, so you can ascertain your affordability and decide on how much you need to borrow to invest in your new property.

What you should know before taking a mortgage loan in Dubai

  • The most important aspect of a mortgage is to have a realistic budget. You would need to understand the following before purchasing a property:
  • your affordability, so look for a property within your budget
  • You need to make a down payment for the house that you plan to buy and in UAE this would typically be 20% of the purchase price. Make sure that you will be able to pay this amount
  • Understand the fee structure well before entering into a contract, for it should not be a burden on your pocket later
  • Get to know about the principal, interest, insurance and taxes that are essential parts of a mortgage
  • Be prepared to make regular repayments according to the EMI calculated based on the loan amount
  • The same EMI rate may continue till your loan is fully repaid or it may be reset at fixed intervals
  • Floating interest rates may change at any time. If it is reduced, you stand to benefit because you would be paying much less than the fixed interest rate, but if it is increased, you will have to pay a lot more interest on your loan. Make sure that you can afford the Dubai mortgage interest rate before you take the home loan
  • A non-refundable processing fee of 0.5 to 1% of the loan amount is charged by the bank for processing your loan application whether or not you decide to take the loan
  • You will be paying more by way of interest if you opt for the buy-to-let mortgage instead of the ownership mortgage as your intention is to profit from the investment 
  • If you want to prepay the Dubai mortgage loan from your personal savings, the bank does not charge you a fee but in case you are shifting your loan to a different lender, you will have to pay 1 to 2% of your loan amount as early settlement charges
  • Be aware that by taking a mortgage loan, you enter into a legal contract with the lender, so non-payment of your debt will give the lender the right to resort to foreclosure, a term given to the process of selling your property to cover the loan amount. It would also affect your credibility to a great extent that it may be very difficult for you to purchase a new property later 

New rules for mortgage Dubai

The long-awaited new rules governing mortgage loans have been issued by the UAE Central Bank. According to the new rules:

  • Expatriates will be allowed to borrow 75% of the total value of a property for a first investment of less than AED 5 million whereas UAE nationals will be allowed to borrow up to 80%
  • For properties worth more than AED 5 million, expatriates and UAE nationals can borrow up to 65% and 70% respectively of the total value of the property
  • All mortgages will be restricted to 50% for off-plan properties irrespective of purpose, value or nationality
  • Loan repayment will be spread over a term of 25 years. Maximum age for expatriates and UAE nationals at the time of the last installment of the loan will be 65 and 70 years respectively
  • EMI cannot be greater than 50% of a borrower’s monthly income and total repayments cannot be more than the annual income earned in 7 years for an expatriate and 8 years for a UAE national
  • The above new rules came into effect from November 2013.

Eligibility for a mortgage loan in Dubai

  • You need to be at least 21 years of age to buy a property
  • Maximum age to get a home loan is 58 years if you are salaried and 60 years if you are self-employed but this can change according to the lender
  • You need to have a steady income to be able to get a mortgage loan as your monthly income alone can help determine your loan amount
  • Clean credit record

Documents required for a mortgage in Dubai

  • Document that proves your identity like your passport or driver’s license
  • Utility bill as proof of residence
  • Age proof 
  • Statement of account from your bank
  • Latest salary slips

How MoneyGulf helps you with home loans in Dubai

  • When you seek our assistance in getting a home loan in Dubai, we offer the following: 
  • We assess the different mortgage products and help you choose the right one from the right lender
  • Our association with a large network of banks lets us help you choose the right product and  you will get access to the most flexible and fastest mortgage loans in Dubai
  • Our team is well experienced and have learned the nuances of banking and real estate operations in UAE. We help with all the requirements associated with a mortgage loan like mortgage underwriting, mortgage sales, mortgage policy development etc.
  • Rest assured that you are in safe hands when you seek our guidance and assistance
  • You will be able to make a prudent and well-informed financial decision with our advice and insight
  • We help you go through a hassle-free loan application process 
  • We save you a lot of your valuable time and energy by giving you the right kind of advice