If you are an expat living in Dubai and considering buying a property, you might wonder what your options are for financing this purchase. One common way to do so is by taking out a mortgage. In this article, we will explain what a mortgage is and how to get a mortgage in Dubai.
What is a Mortgage?
A mortgage is a loan that is used to buy a property. When you obtain a mortgage, you consent to repay the loan over a set period, typically 15 to 30 years. The property you purchase serves as collateral for the loan, meaning that if you fail to make your payments, the lender has the right to repossess the property.
Banks or other financial institutions typically offer mortgages, and the terms and interest rates can differ based on your financial status and the lender In Dubai, several banks offer mortgages to expats, and we will discuss how to get one below.
How to Get a Mortgage in Dubai
1.Determine your budget: Before you start shopping for a property, figuring out how much you can afford to spend is essential. This will help you narrow your search and ensure you don’t overextend yourself financially. To do this, you’ll need to look at your income, expenses, and other debts or financial obligations.
2.Find a lender: Once you know your budget, it’s time to start looking for a lender. Several banks in Dubai offer expats mortgages, including Emirates NBD, Dubai Islamic Bank, and HSBC. You can begin by researching these options online or speaking to a financial advisor.
3.Apply for a mortgage: Once you have found a lender you are interested in working with, you must apply. This typically involves filling out an application form and providing documentation such as your passport, visa, and proof of income. The lender will also conduct a credit check to ensure you can make your payments.
4.Get pre-approved: If approved for a mortgage, you will receive a pre-approval letter from the lender. This letter will state how much you can borrow and the interest rate. Having a pre-approval letter can be helpful when shopping for a property, as it shows sellers that you are a serious buyer.
5.Choose a property: Once pre-approved for a mortgage, it’s time to start looking for a property. You can work with a real estate agent to find properties that fit your budget and preferences. When you find a property you are interested in, you must make an offer and negotiate the price.
6.Close the deal: If your offer is accepted, you must finalise the mortgage and close the deal. This typically involves signing a contract and paying a deposit. The lender will transfer the funds to the seller, and you will take ownership of the property.
Buying a property with a mortgage can be an excellent way for expats in Dubai to invest in their future. Following the steps outlined above, you can find a lender, get pre-approved, and purchase a property that fits your budget and preferences. It’s important to note that obtaining a mortgage in Dubai as an expat may have different requirements and processes than for UAE citizens. For example, some banks may require a larger down-payment or proof of a longer residency period.
Additionally, it’s crucial to consider the additional costs associated with buying a property, such as registration fees, property valuation fees, and insurance. These expenses can add up quickly, so be sure to factor them into your budget.
Finally, it’s recommended to work with a trusted financial advisor and real estate agent to ensure you understand all the terms and conditions of the mortgage and the property purchase. With careful planning and professional guidance, you can successfully purchase a property in Dubai with a mortgage that suits your needs and financial situation.