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Getting a mortgage
1. How do I apply for a mortgage?
Prior to the market crash of 2008, it was fairly easy for expatriates who had a high credit rating to obtain a mortgage in Dubai that covered nearly 90% of the property cost. However, since the recession, banks have tightened their lending procedures, and now it is not unusual for buyers to have to put down between 20 to 50 % payment for a property in cash. Furthermore, many expatriates do not get approval for mortgages. For those that do, expatriates find that there is often more red tape and paperwork than what is ordinary in the UK or the US.
Some mortgage lenders even require collateral in the form of another property. This precaution is taken in view of the past instability of the region.
Many of the institutions that offer mortgages also offer the option of “pre-approved financing”, which allows you to have your loan approved prior to choosing which property in Dubai you would like to purchase. This expedites the overall process and satisfies those sellers that require financing before agreeing to sign a Sale and Purchase Agreement.
As of 2008, mortgages have to be sold by registered financial institutions. The Finance Officers at Choueri Real Estate offer mortgage solutions that are tailor-made for every client’s needs.
2. What do I have to do to qualify for a mortgage?
Expatriates will need to present lenders with the following documentation:
• Passport and copy
• Salary Certificate or evidence of a regular income
• Bank account statements for the past 3-6 months
Mortgages are paid back in monthly installments, with 15 -year plans being the most popular. The maximum length of a mortgage plan in Dubai is 25 years, depending on the age of the buyer. Mortgage repayments, combined with any other monthly expenses, must not exceed 35 per cent of net monthly income.
3. Can I resell my property if I have a mortgage on it?
Yes. you can resell the property if you have a mortgage on the property. The mortgage must be paid off to the bank. The terms and conditions will vary from bank to bank.
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