What is mortgage?
- You have to finance 50% of the off-plan property value using your own funds
- If you approach a bank, you can lend up to 50% against the value of the off-plan property
This percentage is known as the loan to value ratio. This basically means that if the property being purchased is say, AED 1,000,000, the maximum amount the bank will lend against that property is AED 500,000 or 50% for an off-plan purchase and the percentage will be 75% for ready property.
This applies to both UAE nationals as well as expats
- Banks offer applicants who are non-residents with mortgages with an interest rate of about 4.50 %. It is a fixed interest rate, calculated using a 3-month EIBOR rate
- When purchasing a property in the UAE, additional costs associated with a real estate transaction must also be taken into account, such as the cost of appraisal of the property, the real estate commission, the transfer of land and the registration fee for the mortgage
- If more than one application for a mortgage is submitted for the same property at the same time, creditors will be classified and mortgages will be given according to the individual’s credit score.
- In Dubai, the buyer and seller must meet with the Dubai Department of the Land or fiduciary of the property in order to register the transfer of title.
- If you are buying from a secondary market, it is highly recommended to consult a licensed real estate agent for each real estate transaction>
- There are a number of different protocols, depending on whether you are buying a property from a developer, called an “off – plan” purchase, or whether you are buying a property from a private seller called a “resale” purchase.
- When you register with the Dubai Land Department ( DLD ), the DLD will issue a written or electronic mortgage document and the mortgage will be enforceable against third parties
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