10 Tips on how to secure a mortgage in Dubai for expats

Dubai is a great place for expats. It welcomes expats with open arms for opportunities and living a luxurious lifestyle. When buying a property in Dubai, there can be two different modes of payment: Cash payment or mortgage payment. Even though cash payment is easy, not everyone has that amount of cash. Therefore, they consider getting a mortgage from a bank. It is relatively easier to get a mortgage in Dubai.

This article will provide you with ten tips on securing a mortgage in Dubai. Let’s dive in!

1)Research for a Lender

The first step is to research and find a lender. Lenders in Dubai are mainly banks that must be registered with DLD or Dubai Land Department. You can either directly go to the bank to issue a mortgage or hire a mortgage broker who will help you out in the process. It is better to hire a mortgage broker because they will prepare all the documents for you and make acquiring a mortgage much easier. Mortgage brokers have a positive relationship with the bank and third parties.

2)Prepare the Down Payment

The down payment is the initial fee that is paid upfront. In Dubai, you need a minimum down payment of 20%, whereas the rest 80% can be borrowed. This 20% can be collected from savings and earnings or borrowed from friends and family. You can borrow up to 95% in other countries but not in Dubai.

3)Choose the best mortgage

There are mainly two types of mortgages: Fixed rate and Variable rate mortgage. Which of the two will be selected depends upon various factors such as lifestyle, loan amount needed, the property you want to buy, and cash you can afford to put in. One can use an online mortgage calculator to estimate the monthly payments.

4)Prepare the documents

It requires a lot of paperwork to buy a property in Dubai. Therefore, it is important to organize all the documents and be ready to get a mortgage. If the banks believe you are of low risk and a good investment, there is a better chance of success of the application. The documents should be clear to read and error-free. The documents should be submitted in advance. The documents required are Passport, Emirates ID, trade license for self-employed, Visa copy, Salary certificate, and bank statements.

5)Analyze your finances

Banks perform checks to see the type of borrower you are. It is very important to have a healthy credit score in Dubai. A healthy credit score entails that you do not have prior debts and have never experienced bounced cheques or bankruptcy. Etihad Credit Bureau holds this sensitive information, which can be easily accessed.

6)Increase your borrowing power

25% of your monthly salary is often lent to you. Banks perform background checks to confirm your debts, personal loans, leasing agreements, credit cards, vehicle loans, and other financial commitments. It is good, to be honest about your purchasing power and how much you can afford to pay back.

7)Consider the fees and tenure

The maximum payback time in Dubai is 25 years. It is very important to consider interest rates. One should also consider the setup, conveyance, and penalty fees. It is not just the prime amount that should be considered; the added costs should also be counted beforehand.

8)Get a mortgage in-approval letter

The mortgage in-approval letter increases the confidence and purchasing power of the buyer. The approval letter determines how much you can spend, shows no issue in financing the acquisition, lowers the interest rates, and increases the likelihood of your offer being accepted.

9)Find your dream home

The next step is to look for the right property. Dubai is filled with properties that can be bought. You should choose the area you prefer according to your needs. Properties for sale are available at a good price. You can also choose luxury properties for sale that are available at a comparatively higher price. The pre-approval letter is good for 60-90 days.

10)Finalize your purchase and be honest

The last step is to contact the bank to finalize the loan agreement. After following the process, they will pass a mortgage to you, making you the property owner. To be honest about your real financial and employment status is necessary. Employment status can be self-employed or employed by someone.

In conclusion, it is fairly easy to secure a mortgage in Dubai; we have mentioned ten tips for securing a mortgage in Dubai. They are: Research for a lender, prepare the down payment, choose the best mortgage, prepare the documents, analyze your finances, increase your borrowing power, consider the fees and tenure, get a mortgage in-approval letter, find your dream home and finalize your purchase and be honest. These tips are essential to follow to get a mortgage in Dubai.