Navigating the UAE Mortgage Maze

Buying real estate in the UAE with a mortgage can be a challenge for most homebuyers, particularly if it is a first time buyer. Here’s a step by step guide on how best to navigate the maze of options and different processes to complete your purchase successfully:

  1. Before you start your property search, make sure you understand the likelihood of securing finance. There is really no point of spending your valuable time in viewing properties if the search ends in disappointment, through failure to secure finance (a mortgage) at a later stage in the process.
  2. Seek a free mortgage consultation through Home Matters by calling 800 MORTGAGE or asking for a callback by filling out this form or do it yourself through our revolutionary online mortgage sourcing platform;, which is completely free of charge.
  3. Pre-qualifying yourself through either of the above 3 channels will enable you to understand:
    • How much you can borrow
    • Over what duration you can lend
    • The complete costs and down payment required to buy
    • Monthly repayments and interest rates on offer
  4. Once you have had the verbal go-ahead, by understanding what you can borrow, you can then start your property search, whilst simultaneously preparing your mortgage application.
  5. Standard documents required for employed persons are:
    • Passport, visa and Emirates ID copies
    • Up to date salary letter
    • 6 months bank statements
    • Latest credit card statement
  6. Before deciding on which bank or lender to apply for a mortgage, make sure you understand what is on offer throughout the whole market. There are over 30 banks’ lending in the UAE today and many attract clients by using headline or introductory rates. These often look great for a year or two and then the terms deteriorate. Using a respected mortgage consultant or will help you compare and understand the full terms and conditions to make an informed decision.
  7. First milestone of submitting a mortgage application is to secure a mortgage pre-approval, sometimes referred to as an agreement in principle. This should usually take an employed applicant up to 5 working days from submitting 100% of the required documents.
  8. Mortgage pre-approvals are usually valid for 30 up to 90 days depending on the bank or lender. Average duration is 45-60 days.
  9. If your pre-approval expires, this can usually be revalidated by providing additional statements and an updated salary letter. Therefore, do not be concerned or feel pressurized if your pre-approval is about to expire.
  10. A mortgage pre-approval is not a guarantee of finance but is a strong indication that the chosen bank is happy to lend, based on the applicant’s profile. Further due diligence checks are usually conducted at final offer letter stage.
  11. Once you have pre-approval, you are ready to make offers on properties and commit to a sales contract, if a sale is agreed.
  12. If you find the property before mortgage pre-approval is granted, it is advisable to protect yourself in the sales contract, in case the application for finance is declined. Most reputable real estate agencies will assist you with this if asked.
  13. Upon signing the sales contract with mortgage pre-approval, the next stage is for the bank to instruct a valuation on your chosen property. The cost of valuation is AED2,500 up to AED3,000, dependent on the bank. This is paid by the buyer and the valuation is required by the bank to determine how much they are prepared to lend the buyer. The bank will finance an agreed percentage of the purchase price or valuation, whichever is lower. Therefore, if the valuation is lower than the purchase price, the bank will finance on the lower figure, which would leave a shortfall, to be bridged by the buyer.
  14. After a successful valuation, the bank will prepare a mortgage final offer letter (FOL), which is the binding mortgage contract, specific to the chosen property. This is signed by the mortgagee, usually with a bank representative present.
  15. After signing final offer letter, the buyers bank will require proof of buyer’s down payment and a liability letter from the seller bank, if there is an existing mortgage on the property.
  16. Liability letters are usually valid for 15 days from issue and it is the responsibility of the buyer and lending bank to coordinate the settlement of the seller liability.
  17. Once settled, the seller bank will issue clearance documents including original title deed to the buyers bank for safekeeping.
  18. Next stage is to order and collect the No Objection Certificate (NOC) from the developer of the chosen property. Timescales depend on the developer but 7 working days is standard.
  19. After NOC is received, the buyer should prepare managers cheques (not personal cheques) for the down payment and all associated fees for the purchase.
  20. A transfer date, time and location to be mutually agreed with all parties, including the bank. Original identification should be carried to transfer.
  21. At transfer the Dubai Land Department representative will amend the legal title and ownership of the property and managers cheques will be exchanged.
  22. Dubai Land Department representative will issue a new original title deed to be held by the buyers bank and a stamped copy should be handed to the buyer to use as proof of ownership for DEWA activation etc.

If like many thousands of UAE residents, you require a personalized service to manage the end to end process of identifying the best mortgage for your situation, through to legal transfer of title, let Home Matters help. It could save you a lot of money!

First published in EspaceXTRA Volume 17.

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