Is It Easy To Get A Mortgage In Dubai?

As a real estate hub, Dubai is a key destination for buying luxurious property. People from all across the globe wish to have a dream home in Dubai. The lavish lifestyle, top-notch amenities, plenty of real estate options, economic stability, gated communities, and home to many famous landmarks are all features that attract many people to Dubai.

Dubai’s real estate market offers incredible options for buying properties. You can buy a property in Dubai either with cash or with a mortgage. Both options have their own sets of benefits and considerations. Paying in cash is a straightforward process and does not involve interest but demands a lot of savings and usually, it is not so easy and possible for everyone. So, here comes the other option; getting a mortgage. Buying a property in Dubai through a mortgage is an ideal opportunity for those who do not have a heavy amount in hand.

The mortgage requires a lesser upfront amount and facilitates steady cash flow management. But usually, a question arises from homebuyers or investors about getting a mortgage in Dubai; is it easy to get a mortgage in Dubai? If you do not have proper guidelines and information about the process, then getting a mortgage can be complex for you. Through this blog post, get all the necessary information about getting a mortgage in Dubai and make it an easy process. 

Types Of Mortgage In Dubai 

The following are the common types of mortgages in Dubai: 

1. Fixed-Rate Mortgage 

The interest rates remain constant throughout the loan tenure in fixed-rate mortgages. It gives a sense of stability to the borrower because he knows how much he has to pay for a month. 

2. Variable-Rate Mortgage 

In variable-rate mortgages, the interest rates fluctuate, and this fluctuation is based on the Emirates Interbank Offered Rate. In variable-rate mortgages, the interest rate is comparatively lower than other types of mortgages. 

3. Buy-to-let Mortgage 

Buy-to-let mortgage is for those investors who want to buy properties and make it a source of passive income through rental amounts. 

4. Islamic Mortgage 

Islamic mortgage is also known as Sharia-compliant mortgage. It does not involve interest. The lender purchases the property and sells it to the buyer at a profit and the buyer has to pay the amount in installments within a defined period. 

5. Off-plan Mortgage

As the name of the mortgage suggests, it is a type of mortgage for buying off-plan projects in Dubai. The interest rate and downtown payment in an off-plan mortgage are higher. 

Eligibility To Get A Mortgage In Dubai

Your credit score, income, and age determine whether you are eligible to apply for a mortgage in Dubai.

The eligibility criteria are as follows: 

The age of the borrower must be between 21 and 65 to apply for a mortgage in Dubai. 

If you want to apply for a mortgage in Dubai, you must have a stable income source to meet the requirements of minimum income. The minimum salary of a person who wants to apply for a mortgage must be AED 15000 and for self-employed individuals the monthly income should be AED 25000.

Another condition for eligibility to get a mortgage in Dubai is to have a good track record of repaying your debt on time. The mortgage provider - bank or independent firm - will check the credit score of the borrower.

Required Documents To Get A Mortgage In Dubai 

The following are the documents required to get a mortgage in Dubai:

If An Employee In The Company 

• Proof of employment (salary certificate) 
• A copy of your passport 
• Stamped visa copy 
• A copy of your Emirates ID 
• The record of pay slips for the past six months. 
• Bank statement for the past six months. 
• Latest credit cards statements 
• Residence proof (Copy of DEWA bill or tenancy agreement)

If Self-Employed 

• Company profile 
• Copy of company’s trade license 
• Memorandum of association 
• List of loans to your name 
• A copy of your Emirates ID 
• The record of pay slips for the past six months. 
• Bank statement for the past six months.
• Residence proof (Copy of DEWA bill or tenancy agreement)

The Process To Get A Mortgage In Dubai 

The process to get a mortgage in Dubai is straightforward. You simply need to follow some steps. Here is a step-by-step guidance of the process:

Step 1: Find A Lender 

The first step to getting a mortgage in Dubai is to decide whether you directly approach the bank or find a mortgage broker who will work on your behalf to get the best mortgage loan in Dubai. In Dubai, banks are the most common lenders, you can get available mortgage deals from your bank. 

If you are new in the city then hiring a mortgage broker is a better option. Mortgage brokers have invaluable insight, knowledge of the local market, and information about available home loans. They can give you better options that suit your needs. You can focus more on finding the right home rather than catching yourself in the mortgage process. 

Step 2: Choose The Mortgage 

As above-mentioned, there are different types of mortgages including fixed-rate mortgages, variable-rate mortgages, buy-to-let mortgages, Islamic mortgages, and off-plan mortgages. Choose the right type of mortgage for your circumstances. The choice between the right mortgage depends upon different factors such as; the type of property, the amount of loan you need, the deposit amount you can pay, your income, and lifestyle. 

Step 3: Get A Pre-Approval Letter 

The most important step in the process of getting a mortgage in Dubai is to get a pre-approval letter. This is an official document issued by the bank as evidence of the eligibility of the borrower to get mortgage financing and outlines the maximum mortgage amount. Normally the bank takes three to five days to issue a pre-approval letter. 

Step 4: Find Your Desired Property 

After getting a pre-approval letter, the next step is to find your desired property. The validity of a pre-approval letter is 60 to 90 days. During this duration, you must find a property that meets your needs and expectations. Undoubtedly, Dubai is exceptional in offering world-class properties. Many professional agents and renowned real estate companies contribute to Dubai’s development. If you want assistance and help in finding your desired home, a well-reputed and famous real estate company - Sotheby's International Realty - is the best option to choose. A very professional and experienced team is always there to help in finding the right property. 

Step 5: Finalize Property Purchase

Once you find your property, then the last step is to finalize the property purchase by signing the lease agreement and paying a deposit. Then the lender will check your property’s value to make sure it’s worth what you are borrowing, if everything looks good, the lender will give you the loan amount, allowing you to complete the purchase, and officially become the owner of the property. 

Final Thoughts 

If you do not follow the process and there is a lack of information and knowledge about getting a mortgage in Dubai, then this straightforward process can be complex and turn into a milestone for you.

To find the best option for you, it is advised to research, analyze the market, and compare different mortgage options, interest rates, and terms from various lenders.