How to Get a Mortgage in Dubai for Foreigners

23.12.2023
How to Get a Mortgage in Dubai for Foreigners

Dubai is a rapidly developing city and a popular destination for real estate investments. Many foreigners, attracted by its modernity and opportunities, consider purchasing property in this city. However, acquiring property in Dubai often proves to be more challenging in practice than in theory. In this article, we provide a guide that will help foreign citizens obtain a mortgage in Dubai and fulfill their dream of owning a home in this vibrant metropolis.

It is important to note that the procedures for obtaining a mortgage for foreigners may differ from those in your own country. Therefore, it is essential to be well-informed about specific requirements and procedures to ensure that you can successfully secure a mortgage in Dubai.

By following this guide, you will gain a better understanding of the mortgage acquisition process in Dubai and overcome the obstacles associated with purchasing property in this remarkable city.

Requirements for Borrowers According to Dubai's Legislation

  • Age requirement: 21 to 65 years for individuals employed on a contract basis, up to 70 years for entrepreneurs.
  • Resident of the UAE.
  • Bank statements for the past 3-6 months.
  • Adequate income level.
  • Minimum down payment of 25% of the property value.
  • Engaged in business or officially employed in the UAE.
  • Ownership of property in the UAE (desirable but not mandatory).
  • Please note that depending on the bank, additional requirements may be imposed.
  • Bank Requirements for Mortgage Property:
  • The property must be located in a freehold zone.
  • Construction of the property is already completed, or the property will be delivered within two years from the mortgage approval.

Stages of Obtaining a Mortgage Loan

1. Market Research

Study the real estate market in Dubai and determine the type of property you are interested in (e.g., apartment, villa, etc.). Define your budget and explore the available mortgage options for foreigners.

2. Bank Selection

Choose a bank that offers mortgage services to foreigners. Some of the popular banks in Dubai include Emirates NBD, Dubai Islamic Bank, and Mashreq Bank. Before making a decision, carefully assess the mortgage interest rate. Often, a fixed interest rate is set for a short period, after which a margin is added. Thoroughly review the interest rates and conditions.

It is important to note that the mortgage interest rate in Dubai can be:

- Fixed for the entire loan period.

- Floating (interest amount varies based on the EIBOR, the interbank rate of the UAE central bank, and interest is calculated on the outstanding loan balance).

- Discounted (a preferential period with a lower interest rate is provided).

3. Document Collection

- Gather the necessary documents, including:

- Completed mortgage application.

- Passport.

- Copy of the applicant's visa.

- Proof of permanent residency in the UAE.

- Emirates ID.

- Income statements for the past six months, additional income proof.

- Family composition certificate.

- Entrepreneurs should provide financial statements.

4. Application Submission

Next, submit an application for pre-approval of the loan. The bank will assess your repayment capacity and determine the maximum loan amount you can obtain.

Within 3-5 days, a bank representative will carefully review your data and repayment capacity. After the application is approved, you will have 2 months to choose a property that meets your needs and budget.

5. Signing the Agreement

The next step is to sign the Letter of Intent and make the initial deposit by check. Prior to this, the bank will conduct an appraisal of the chosen property to determine its value and ensure its eligibility for a mortgage loan.

6. Contract Signing and Property Registration

After the mortgage loan is approved, you will sign a contract with the bank and proceed with the property registration process at the Dubai Land Department. The contract will outline the loan terms, repayment schedule, interest rates, and other details. The original property ownership certificate will remain with the bank.

If you wish to pay off the mortgage early, you will be required to pay the bank a fee of at least 10,000 dirhams (1% of the mortgage amount).

Navigating all the stages, from selecting the bank to signing the contract, can be much easier with the assistance of a qualified real estate agency representative. We provide comprehensive legal and accounting support at every step of the transaction. Simply submit your request on our website, and we will contact you promptly.

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