The UAE has established itself as one of the most prosperous and progressive countries in the world today in many aspects like international trade, tourism, multiculturalism, lifestyle, and more. This has made the UAE, a top choice for expatriates looking to migrate.
With a growing population of nearly 9 million, the real estate market in the United Arab Emirates (UAE) is expanding fourfold. The availability of affordable mortgages, coupled with a stable economy and decent returns on investments, has made it an attractive opportunity for investors and homebuyers globally to invest in the UAE real estate.
However, getting your way around mortgages in the UAE for these investments can be pretty overwhelming, especially for first-time homebuyers.
Below is a comprehensive guide to mortgages in the UAE real estate market to help you make informed decisions while buying a property.
Understanding Mortgages in the UAE
Let’s first understand the meaning of mortgage. A mortgage is a loan taken to purchase a property, with the property serving as collateral for the loan.
In the UAE, mortgages are available from various monetary sources, such as banks, financial institutions, and government entities.
The maximum amount you can borrow depends on factors such as the source of income, credit score, and the property’s value.
Types of Mortgages Available in the UAE
In the UAE, there are several types of mortgage solutions available through various banks and financial institutions
Fixed Rate Mortgage
This is the most common type of mortgage. The rate of interest generally remains fixed throughout the duration of the loan.
Variable Rate Mortgage
This is a type of home loan where the rate of interest is not fixed and can fluctuate over time. The variable-rate mortgage could be attractive in the beginning by offering lower interest rates, but it may be risky in the long run as interest rates may rise, leading to higher monthly payments.
Islamic Home Finance
This home loan is also known as a Sharia-compliant mortgage. This type of mortgage follows Islamic finance principles and is structured differently than conventional mortgages. Instead of charging interest, it involves a profit-sharing arrangement between the bank and the borrower.
Off-plan Mortgage
This type of mortgage is used to finance the purchase of a property that is still under construction. The loan is disbursed in stages as the construction progresses.
Equity Release Mortgage
This type of mortgage allows homeowners to borrow against the equity of their home, either through a lump sum payment or a line of credit. It is typically used by homeowners who need access to cash but do not want to sell their property.
If you already have a property in the UAE, equity release or mortgage refinancing might be a better opportunity for you to increase your property’s net worth.
How To Get A Mortgage In The UAE?
Getting a mortgage in the UAE can be a complex process, and it’s advisable to work with a reputable lender or broker who can guide you through the process.
Take a look at the steps involved in a mortgage journey:
Pre-Approval
The primary step in getting any sort of mortgage is to get a pre-approval. This step involves providing the lender with your financial information to determine whether you qualify for a mortgage and the amount you can borrow.
Property valuation
Once you find a property, the lender will require a property valuation to determine its value.
Final approval
After the property valuation, the lender will review your financial information to determine your eligibility for the loan and approve it if there are no issues.
At PRYPCO, we’ll help you find the best mortgage that fits your budget and requirements. Our home finance process is simple, secure, and straightforward. Submit your documents and get swift mortgage pre-approval within 48 hours to become a proud homeowner.
What Are The General Requirements To Obtain A Mortgage?
What Are The General Requirements To Obtain A Mortgage?
In the UAE, both locals and expatriates can purchase properties. However, there are certain requirements when it comes to obtaining a mortgage.
The requirements are:
– You need to be a UAE national or resident.
– You need to be between 21 and 65 years of age.
– You should have a minimum monthly income of at least AED 10,000 if you are a salaried individual or have had a registered business for at least one year as a self-employed individual.
Non-residents can also obtain a mortgage in the UAE. However, there are only a handful of institutions that lend to non-residents.
Get in touch with a PRYPCO Mortgage Advisor if you wish to know more.
Calculating your Mortgage Rate in the UAE
Calculating a mortgage can be a complex and uncertain process, but we are here to help you with it.
PRYPCO’s mortgage calculator is designed to give you a clear picture of your options and rate of interest so you can make an informed decision.
You can filter your search by interest rate, loan term, and other factors to find the best mortgage deals for your needs.
As PRYPCO partners with multiple lenders, you can be sure you’re getting a competitive rate.
Check out our free mortgage calculator here!
Buying a property in the UAE can be a lucrative investment; however, getting a mortgage for it may be a daunting process.
PRYPCO can help you ensure a straightforward and hassle-free mortgage experience.
Our team of mortgage advisors and ex-bankers will help you and guide you through the process so that you can make the best choice.
