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Getting a Mortgage in Dubai - Five Tips for Expats

Holo Blog

Whether you're starting to consider buying in Dubai or have decided it's definitely something you want to pursue, there's a lot to think about. Where do you want to buy? Do you see yourself in an apartment or a villa? How much will it cost? How much can you borrow? And what's the mortgage process like? Buying a home in the UAE can be complicated but we're here to make it simpler. Our Mortgage experts have pulled together their top five tips for expats looking to get a Dubai Mortgage.

1. Start your research

Before starting the mortgage application process, you'll want to know what area you want to buy and the type of property. Most importantly you'll need to know how much you'll need to buy your dream home, and assess your affordability.

Holo's Mortgage Calculator is the best mortgage calculator in Dubai. In less time than it takes to boil a kettle, it will tell you how much you could borrow. Just answer a few questions and it will search over 500 mortgage products, from all the banks and find you the best deal for your needs.

It's easy to assume that your bank will offer you the best interest rate or terms on your home loan, but that's not the case. Using an online mortgage calculator saves you time researching the market, let it do some of the hard work for you!

2. Have a chat with a mortgage advisor 

A great mortgage advisor will take the time to understand your circumstances and needs, and give you a clear overview of the process and timeline. They should know the process inside out and be able to give you expert and honest advice.

Remember, mortgage brokers can add additional costs to your home-buying journey but Holo is 100% free and impartial. As soon as you've used the mortgage calculator you'll be assigned your personal Mortgage Manager and they'll give you a call to get to know your needs in more detail.

3. Clear any debt

Before you apply for a mortgage, you should look to minimise your borrowing. Reduce your credit card spending to less than 30% of your limit. Make sure your bills are all paid on time. It may sound simple or obvious but any unpaid bills or late payments will be flagged to lenders, as will your credit availability.

Your credit score needs to be good, not necessarily perfect. You will likely get a better interest rate on your Dubai mortgage or more preferential repayment terms with a stronger credit score. Therefore it pays to pay down any debt. You can check your credit score in the UAE with the AECB (Al Etihad Credit Bureau).

4. Get to know the additional costs

If you're a Dubai expat who owns property in your home country, you may be aware that there will be extra fees. Extra fees involved in the home-buying process will however, be different from home. If you're a Dubai expat looking to buy in another Emirate, fees may differ further. Educating yourself about the different addons will save you from any shocks further down the line, help manage your expectations, and enable you to factor these into your borrowing.

Typically the fees associated with buying a property in Dubai include:

  • Valuation Fee AED 2,500 - 3,000 + VAT - Fee paid by the buyer to assess the current market value of the property they wish to buy.
  • Bank Processing Fee 0-1% + VAT of loan amount - This is a fee charged by the bank for processing your mortgage and is normally charged before your Final Offer Letter is issued.
  • Land Department Fee 4% of property value + AED 580 - This is a one-time fee paid to the DLD (Dubai Land Department) for registering the Real Estate transaction.
  • Trustee Fee AED 4,000 + VAT - Fee charged by the trustee office for facilitating the property transaction on behalf of the DLD.
  • Mortgage Registration 0.25% of loan amount + 250 AED - This is a fee charged for the registration of a mortgage against a property. This is charged on the day of transfer.
  • Real Estate Fee 2% of property value + VAT - This is a fee charged by your Real Estate Agent for their services.

Some banks will allow you to add a portion of the fees to the mortgage loan amount you want to borrow.

5. Get a pre-approval

The best part of buying a new home is taking the time to imagine where you're going to live and what the space is going to look like. But many sellers and real estate agents won't want to show you around a property or start searching the market on your behalf unless they know you're a serious buyer.

A pre-approval happens when you submit your Dubai mortgage application. Pre-approvals do not guarantee the mortgage, think of them as a decision in principle that is dependent on affordability checks and subject to the valuation of the property you want to buy. Having a pre-approval shows that you are committed to buying somewhere and that a lender has confirmed that you are financially eligible to buy.

Once you've got the pre-approval, you're in a position to make an offer on a property, and things start to get very real, and very exciting!

Want to know something we've not covered here? Check out our Mortgage Frequently Asked Questions.

This blog is for educational purposes, but everyone's case is unique, and local guidelines and regulations may change. Our mortgage advisors can help you with any question you may have and have the latest advice. Get in touch. 

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