UAE Home Finance, Mortgages, Islamic Finance (FAQ’s)

Buying a house is a lifetime dream for everyone, considering a mortgage to buy property is a long-term commitment. Different options are available from different banks, but it is very important to do your homework and take and informative decision. Our mortgage search engine provides you detailed information of the bank offering which you can apply for after comparing minimum salary requirement, processing fees and interest rate (profit rate).

Points to Consider before taking final decision

• 1. Interest Rate

  Most of the bank offers a certain period of fixed rate offer which starts from 1st year. After fixed rate period Variable rate start which varies with the market rate. Your monthly repayment will change after rate changes from fixed to variable.

• 2. Islamic/ Conventional Finance

  Banks in UAE offers both Islamic and conventional mortgage finance. Islamic mortgage is Sharia-compliant finance. You can choose finance as per your requirement. In conventional finance banks gives you loan to buy property and charge interest on the loan, In Islamic mortgage bank buys property on behalf of the customer and take monthly rent from the customer and sells it back to the customer after completion of the mortgage period.

• 3. Processing fee

  There is one-time processing fee which varies from bank to bank. Some bank charges pre-approval fee also. It’s a minimal amount which is adjusted in the final processing fees.

• 4. Pre-approval

  Before finalizing the property, you should apply for Pre-approval. Pre-approval always has a validity which gives you time to select and finalize the property. With Preapproval you will be taken seriously by the Real Estate Brokers and the Property sellers. Preapproval will also give you a sense of security before finalizing the property.

• 5. Valuation of property

  Banks always do valuation of the property to determine the exact valuation. Bank valuation can vary from your actual buying price. Bank always consider their valuation to calculate the final finance amount. For e.g. (if valuation of the property comes AED 1,000,000 and your buying price is AED 1,050,000 then maximum finance amount allowed will be AED 750,000 [if down payment is 25%]).

• 6. Down payment

• a. If Property price is less than or equal to AED 5 Million

  For first Mortgage, minimum 25% down payment is required for Expats and minimum 20% down payment required for UAE nationals.

• b. If Property price is more than AED 5 Million

  For first Mortgage, minimum 35% down payment is required for Expats and minimum 30% down payment required for UAE nationals.
  For the second and third Mortgage, in case of expats minimum 40% down payment is required and 35% is required in case of UAE nationals.

• 7. Minimum Salary/Income criteria

  Each bank has minimum salary/income criteria which is required to be eligible for the finance.

• 8. Flat Rate vs Reducing Rate

  The reducing rate is the rate which is charged on the outstanding balance, whereas flat rate is the rate which is charged on the Initial principal amount for the duration of the finance period. You should compare the reducing rate or flat rate before taking a decision while selecting mortgage. Most of the bank consider reducing rate to make calculation and finalizing the monthly installment of the finance.

• 9. Early Settlement/ Prepayment Charge

  Maximum tenure possible is 25 years, if you plan to do any part payment then bank can charge you a pre-payment charge which varies from bank to bank.

• 10. Tenure

  Maximum tenure you can get up to 25 years or till 65 years of age (for Salaried)/70 years of age (for self-employed) whichever is less.

• 11. Selling the property before paying off the Finance

  You can sell off your property at any point of time in that case the buyer of the property will pay the outstanding amount.

• 12. Commercial property/Non-resident Finance

  Bank also provide finance for commercial properties like offices, retails space depends on the eligibility of the client. Some banks also provide finance to Non- Residents if customer meet the eligibility criteria of the bank.

• 13. DBR Calculation (Debt Burden Ratio Calculator

  DBR calculation show you how much maximum you can pay for taking finance. Maximum DBR allowed is 50%. Example if your salary is AED 10,000 and you already having monthly liabilities of AED 3,000 then you can maximum 2,000 towards your Mortgage. For more information you can apply for the finance with your details, Mortgage advisor will call you and reply your queries

For more information you can apply for the finance with your details, Mortgage advisor will call you and reply your queries