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About Mortgage Loan

A mortgage is a loan used to purchase a property or real estate. The property serves as collateral for the loan, and the borrower makes monthly payments to repay the loan over a set period of time, typically 15 or 30 years.

In a mortgage loan, the borrower typically makes a down payment and the lender provides the remaining amount needed to purchase the property. The interest rate on the loan, along with the term length and the borrower’s credit history, can affect the monthly payment amount.

There are different types of mortgage loans, including fixed-rate mortgages, adjustable-rate mortgages (ARMs), and government-backed loans (e.g. FHA, VA). It’s important to consider factors such as your budget, credit score, and long-term financial goals when choosing a mortgage loan that fits your needs.

The best mortgage offer in the UAE depends on an individual’s financial situation and specific needs. Some factors to consider when comparing mortgage offers include interest rates, loan terms, fees, and loan repayment options.

Some popular mortgage providers in the UAE include:

Rak bank
Fab bank
Emirates NBD
Emirates Islamic
Abu Dhabi Commercial Bank (ADCB)
Dubai Islamic Bank (DIB)
Mashreq Bank
HSBC
It’s important to compare the terms and conditions of different mortgage offers, and to work with a financial advisor to determine the best option for your specific situation.

Information You Must Know Before Taking A Mortgage Loan

The most significant aspect of a mortgage is to keep a realistic budget in mind. An applicant needs to understand the following before purchasing a property:

  • The value of the chosen property must suit the budget
  • You have to submit a down payment for the chosen property. In UAE, it would be typically a 20% of the purchase value. One must be ready to pay this amount.
  • Before entering into a contract, understanding the fee structure thoroughly is very important.
  • Learn the points regarding principal, interest, insurance and taxes that are essential parts to get a mortgage loan.
  • Get ready to get routine repayments done as per the EMI calculated depending on the loan amount.
  • The EMI rate will continue till the loan gets fully repaid or it gets reset at fixed intervals.
  • Variable interest rates may change at any time. If it gets reduced, an applicant gets benefited because he would pay much lesser than the fixed interest rate. However, if it gets increased, the applicant would be asked to pay a lot more interest on the same loan. Hence, one must ensure that he can afford the Dubai mortgage interest rate before taking the mortgage loan.
  • A non-refundable processing charge of 0.5 to 1% of the loan amount gets charged by the bank for processing a loan application whether or not one decides to take the loan.
  • One would have to pay more by way of interest if he chooses buy-to-let mortgage instead of the ownership mortgage as his intends to profit from the very investment.
  • If the applicant wants to prepay the Dubai mortgage loan from his personal savings, the bank will not charge a fee. However, in case he shifts the loan to a different loan provider, he will be asked to pay 1 to 2% of the loan amount as early settlement fees.
  • By availing a mortgage loan, one enters into a legal contract with the loan provider. Non-payment of the debt gives the loan provider the right to opt for foreclosure which means he can sell the property to recover the loan amount. It negatively influences the applicant’s credibility highly. It can turn out to be difficult for the applicant to purchase a new property in future.

New Rules For Mortgage UAE

The new rules of mortgage loans have been issued by the UAE Central Bank. As per the new rules:

  • Non-natives get allowed to take a loan of 75% of the total value of a chosen property for the first investment of less than AED 5 million whereas UAE residents will be allowed to get loans up to 80%.
    For assets worth more than AED 5 million, non-natives and UAE residents can take loan up to 65% and 70% respectively of the total value of the property.
  • All mortgages get restricted to 50% for off-plan properties or assets irrespective of their purpose, value or nationality.
  • Loan repayment timeline can be extended up to 25 years. Maximum age for non-natives and UAE residents as loan applicants are 65 and 70 years respectively.
  • EMI cannot be more than 50% of a borrower’s monthly income. Total repayments cannot exceed the yearly income earned in 7 years for a non-native and 8 years for a UAE resident.
  • Since November 2013, the above new rules came into effect.

Eligibility For A Mortgage Loan In UAE

  • The minimum age of a loan applicant is 21 years.
  • The maximum age of a loan applicant is 58 years. If an applicant is salaried and he is 60 years of age with a self-employment, it can change according to the loan provider.
  • An applicant needs to have a stable earning to repay the mortgage loan as his monthly income alone can help him in determining the loan amount.
  • Clean credit record.

Documents Required For A Mortgage Loan In UAE

Documents that confirms the applicant’s identity such as his passport or driver’s license.

  • Proof of residence.
  • Age proof
  • Bank account statement.
  • Latest salary slips

Frequently Ask Questions

If you have a question that deals with clients, customers or the public in general, there is bound to be a need for the FAQ page.

Some loan providers may provide insurance cover on your loan. If not, we advise that you take out your own insurance to cover you in the event of being unable to repay your loan due to loss of job, illness or death.

Though it is not mandatory to transfer your salary to the bank for applying for a loan but salary transfer loan offers more options and lowers interest rates.

Most Banks in UAE provides salary transfer loan to there list of approved company employees only.

Tentatively it should take a weeks time if all documents are complete however it may vary in bank to bank loan application process.

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Now apply for a Loan online, All you need to do is provide your details below application form.