What is a Mortgage?

Simply explained, a mortgage is a long-term loan usually used for purchasing a domestic or commercial property. The Lender, normally a bank, will then take monthly payments (instalments) to recover the loan amount from the borrower.

A mortgage in the UAE is paid in instalments that include both interest and a payment on the principle amount that has been borrowed.

Who can Apply?

Persons who are employed, self-employed and people who are interested from abroad (non-residents)

What is my first action step?

Call our Mortgage hotline, or leave us your details on our contact page and an advisor will get in touch with you.

How much is my borrowing limit?

Your borrowing limit depends on your current income and existing liabilities. This may vary from bank to bank. However, we have an extensive array of plans and products and our advisors can help you select the best plan for your needs.

How high can my loan be, in comparison to the value loan available?

This may vary depending on your nationality. In the United Arab Emirates, nationals can get up to 80% whereas expatriates can get up to 75% for their first purchases for properties less than 5,000,000 AED.

What are the rates I should expect in the UAE?

Typical rates are between 3.49% to 7%

How much is this going to cost?

For Example:

  • Bank arrangement fee – from 0% to 1% of the loan amount
  • Valuation fee – ranges from AED 2,500.00 – 3,500.00
  • Dubai Land Department property transfer fee – 4% of the property sale price
  • Dubai Land Department mortgage registration fee – 0.25% of the mortgage amount
  • Dubai Land Department title deed fee of AED 540
  • Trustee Administration Fee of AED 4,000

Can non-residents avail financing in the UAE

This can be done. However, the terms for non-residents will be different and the rates may be slightly higher.

How long is the processing time for a mortgage approval?

This depends on your occupation. Salaried candidates will usually have to endure 1 week until approval, whereas self-employed candidates may have to endure a longer period.

How do I obtain a life insurance for the value of the mortgage?

Banks will always insist on a life insurance for the value of the mortgage, which tends to be expensive. However, Insureme can obtain this for you, at nearly half the cost.

How do I protect my asset?

Protection of asset is very crucial and this can be done by having a Will or registering the asset under an offshore company.

What is meant by ‘Agreement in Principle’ when enquiring for a mortgage?

This term indicates that the applicant has been accepted for a mortgage or loan provided that the personal financial circumstances and information supplied are confirmed.

Further satisfactory criteria and elements are required for a successful application, such as employment status and credit scoring.

Why should I choose Dubai?

Property in Dubai is still a sure-fire way to make money; the market is growing steadily and some off-plan developments have been known to sell out within 48 hours of release, with profits of 100% prior to completion.

With some of the world’s most awe-inspiring constructions underway, this emirate is in a league of its own and in the space of only one decade, this once modest desert sheikdom has risen to become a world economic player.

The government actively encourages foreign buyers with tax-free investment and the creation of the multi-million dollar Dubailand, Dubai Media City and Dubai International Financial Centre means increased tourist numbers and international companies are basing themselves in the emirate and taking full advantage of the prestige and great fiscal benefits available.

With demand still outstripping supply for quality villas and apartments to accommodate a boom in foreign workers and visitors to Dubai, the real estate market is set to remain buoyant and highly profitable for the foreseeable future. Many experts even suggest that the Dubai property market has only just started to take off, indicating that prices can only go up with current demand levels.

What’s the difference between Islamic/Shariah Loans and Mortgages?

Although both Shariah loans and Mortgages fulfil the same role (providing money to a borrower) Shariah loans do not charge interest – they are based on Islamic Profit-share principals. Shariah loans are similar to hire/purchase agreements in that the title of the asset stays with the lender of the money, until the final loan payment is made – and the title is then transferred unencumbered to the buyer. For a mortgage, the title is always with the buyer, but a “registered interest” of the bank stays on that title until the last payment is made – and the registered interest is then removed.

What type of properties do you finance?

We provide home financing for properties from our approved list of builders. Our financing is available for home construction and for the purchase of existing / ready property.

Why is the registration of the title so important?

Registration of a person’s interest on the title of a property provides conclusive evidence of his ownership. Article 22 of the new Law provides that the Land Department shall issue a title deed of real property rights in accordance with the current records in the Real Property Registers. Article 24 goes further to say that the title deed referred to under Article 22 shall have absolute power of evidence to establish real property rights.

What is the process for title registration?

Article 6 of the New Law states that the Land Department shall solely, to the exclusion of others, be authorised to register the real property rights and the long term leases as provided under Article 4. Once a property is completed and handed over to the purchaser, the purchaser can then advise the developer to register the title of the property in the name of the purchaser in the Real Property Register at the Land Department. The Sale and Purchase Agreement as well as the accompanying scheme documentation will possibly need to be translated into Arabic (which should be undertaken by the developer). The purchaser will then be asked to sign the Land Department standard transfer form, for the internal use of the Land Department. This form will provide the details of the parties, the property, the purchase price etc.

Will the Land Department charge fees for the registration of these transfers?

Both the seller and the purchaser will be asked to pay the Land Department’s fees at the time of title registration. These currently amount to 4% of the purchase price, which is divided into 2% payable by the purchaser and 2% payable by the seller. However, it should be noted that developers commonly require the purchaser to pay the full 4%.

Will the Land Department charge the 4% fee on the original purchase price or the most recent purchase price?

Current practice of the Land Department is that fees are charged on the original purchase price. However, as the Land Department introduces new practices, it is envisaged that the basis on which fees are levied may change, and they may take into account the purchase price in any on-sale agreements or the market value of the property.

How would the Land Department know the “market value” of the property for the purpose of ascertaining what amount the 4% fee is to be levied on?

Article 6, point 7 of the new Law requires the Land Department to “lay down the rules in connection with the evaluation of real properties”. It is envisaged that the Land Department will employ its own expert valuers.

The Land Department’s valuers will be tasked to:

  • verify a property value; and
  • provide a valuation for a prospective purchaser, if the prospective purchaser so requests.

Disclaimer : We hold no responsibility for any information which must have changed in the due course of time. The details mentioned are all indicative. Innovations disclaim any responsibility for any decision taken based on these calculations.

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