What is a mortgage?

A mortgage is a type of loan taken from a lender to buy a home, a piece of land, or property, but applying for a mortgage or a home loan can be an extremely daunting task that many people fear or just dislike to go through because of its legal technicalities and the risks involved.

Thus, if you are someone who wants to apply for a mortgage loan in the UAE, and is struggling to find what the process is for getting a mortgage and what documents are required, you don’t need to be worried, because you will get all the information in this blog.

Why do people need a mortgage? 

The mortgage becomes a necessity if someone cannot pay for a home or property from their pocket and as properties are usually pretty expensive, it is extremely common for people to take a mortgage loan instead of spending their savings or full income on properties, also there is a saying which says “never place all your eggs in the same basket”, doing this also helps to keep the funds free for other expenses, and in a country like the UAE where the typical income of a person is 99,165 AED per year, with a 3.68% inflation rate ( as of 2023) much less number of people can now afford to make huge investments in real estate, so they end up applying for a mortgage in the UAE.

Thus, if you are someone in the UAE who needs help in applying for a mortgage or loan, we can assure you that there are several banks and institutions who are offering mortgages in the UAE with an easy, hassle-free process that can be of great help for you to acquire a loan.

How to apply for a mortgage in the UAE?

To apply for a loan in the UAE, you need to contact a bank or a mortgage broker, you can even go to comparison websites in the UAE to look for deals from different lenders.

Also Read: How Much Does It Cost To Build a House In UAE?

Who is Eligible for a mortgage loan in the UAE?

Foreigners and expatriates can get a loan in the UAE, you just need to meet a few requirements of a set criteria, whether you are self-employed, a business owner, or a normal working employee you can obtain a loan, but you first need a clean credit history, which is the most important thing, if you don’t have a clean credit history obtaining a loan for you will be difficult and if you don’t have a credit history get a credit card and pay your dues each month in full to build a credit history, it also depends on the area where you are applying for the loan and there is a difference in rules of different lenders from whom you are acquiring the loan.

Some banks and institutions only prefer applicants who work from some specific companies which is a trait of the system. Also, you need to be working for 6 months or a year in your current job to obtain a mortgage loan, for business owners the business they own should be running for 2 years before they can obtain a loan. 

Documents Required for a Home Loan in the UAE 

The documents required are basically the same for UAE nationals, expats and foreigners, or nonresidents, but the expats and foreigners need to fulfill a few additional requirements for obtaining a loan. The main things you need are:

• A copy of your passport
• A copy of your visa (if you are a resident or nonresident)
• Proof of residence in the UAE or foreign country ( for nonresidents)and proof of your current or foreign address ( i.e your house bill )
• Proof of salary ( you need to be earning 15k to 25k to achieve the criteria of the loan for business owners your company turnover needs to be 3 Million AED)
• You need to show your latest credit card statements ( for business owners your personal and company bank statements from the last 6 months)
• You need to show your salary certificate ( 30 days old or less ) or a valid trade license copy ( for business owners )
• Latest salary slips of the past 3-6 months or the MOA – memorandum of association with all the amendments (for self employed-business owners) 
• You also need to show your Tax returns 
• You need to pay a property insurance fee. It can vary depending on the type of home or property you are buying, it is around 0.1% of the value of your property.
• Mortgage costs are also a requirement you need to pay, a fee of 0.25% of the balance amount is required to register for a loan
• You need to be 21 – 70 years old to get a loan in the UAE ( for a nonresident the age limit is 65 years )

The terms for the loans are 25 years and you need to pay the loan before you turn 70 years of age.

Furthermore, getting a loan in the UAE is a difficult and challenging process. A loan can be denied or you can be rejected as an applicant on several grounds because there are several rules and criteria a person needs to meet before applying for a loan. But we hope the information we gathered for getting a mortgage in the UAE will be helpful to you when you buy your home or property.