guide to buying off plan properties in dubai

Guide to Property Mortgage in Dubai

Congratulations on deciding to buy a property in Dubai! It’s great news because you have different ways to pay for it, such as post-handover payment plans, mortgages, and various payment methods. While many people buy properties with cash, there has been a rise in the number of properties bought using property mortgage in Dubai. In fact, in 2021, the total value of properties purchased with mortgages reached a record high of DH127 billion.

1. Research and Planning:

Before diving into the mortgage process, it’s crucial to conduct thorough research and plan your finances. Explore the Dubai real estate market, identify your desired property type, and determine your budget. Familiarize yourself with the different types of mortgages available in Dubai and compare interest rates, terms, and conditions.

2. Speak to An Advisor:

Finding the right Property mortgage in Dubai can feel overwhelming because there’s more to consider than just the interest rates. Things like life insurance, property insurance, and loan-to-value ratios are important too. To make it easier, start by talking to a knowledgeable mortgage advisor from a trusted company. Big mortgage brokerages usually work with many banks in the UAE and can offer a variety of mortgage options. This will save you time and money when getting your mortgage.

3. Pre-Approval:

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Contact banks or financial institutions in Dubai to obtain pre-approval for a mortgage. Provide the necessary documentation, such as identification proof, income statements, and bank statements. The lender will evaluate your financial eligibility based on factors like income, credit history, and debt-to-income ratio. Obtaining pre-approval for a mortgage can take time, and it’s recommended to secure it before selecting a property or signing the MOU (Memorandum of Understanding). Having pre-approval gives you a clear idea of your budget for the property. Keep in mind that pre-approvals are typically valid for 60 days.

4. Sales and Purchase Agreement:

After finding a suitable property, negotiate the price with the seller and agree on the terms of the sale. Sign a Sales and Purchase Agreement (SPA) that outlines the conditions of the purchase. Pay the seller a deposit, typically around 10% of the property value.

5. Mortgage Application and Valuation:

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Initiate the mortgage application process with your chosen lender. Submit required documents, including the Sales and Purchase Agreement (SPA), property documents, and additional paperwork specified by the lender. The lender will conduct a property valuation to determine its market value and assess its suitability for mortgage financing.

The valuation is a crucial step in the mortgage process because the bank will lend money based on either the valuation amount or the MOU amount, whichever is lower. If the valuation comes in lower than the MOU price, the buyer will need to pay the difference. Usually, valuations are valid for 45 days.

6. Mortgage Approval and Offer:

The lender will review your application and property valuation report. If satisfied, they will provide a mortgage offer detailing the loan amount, interest rate, tenure, and other terms and conditions. Carefully review the offer, including any fees or penalties associated with the mortgage.

Engage a legal representative or conveyancer to handle the legal aspects of the transaction. Obtain necessary approvals and clearances from relevant authorities. Complete the required documentation, such as the Memorandum of Understanding (MOU) and Mortgage Agreement.

8. Mortgage Registration:

Pay the applicable fees and register the mortgage with the Dubai Land Department (DLD). The DLD will issue a Title Deed reflecting the mortgage details and your ownership of the property.

9. Congratulation:

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Congratulations on becoming a property owner! We’re here to assist you in finding the perfect mortgage solution that suits your needs and goals. Contact one of our mortgage advisors today, and we’ll help you obtain a pre-approval from a bank in just a few days. Rest assured, we guarantee the best mortgage products with the most favorable rates for you.

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