Being an owner of luxury property feels a little different, right? Being capable enough to provide a comfortable and lavish lifestyle for loved ones is an excellent achievement. Things like this make a family proud. And what is even better than owning a luxury house in Dubai? But things do not always go as planned. Not all of us are born with golden spoons in our mouths. In other words, not all of us have generational wealth. Most people work hard to make a living, and despite all this, everyone thinks of living in a luxury home.
The only way an individual can purchase a property in Dubai is either in cash or via mortgage. However, as discussed earlier, not all people have a strong financial status. Therefore, property purchase via cash is not an option. Let us talk about another option for luxury home seekers. The answer is a mortgage. Go through the blog here to find out more.
How to finance a mortgage in Dubai?
At present, there are two primary types of financing institutions in Dubai: mortgage firms and banks. People usually prefer going to banks in such situations. You will find different types of mortgage plans:
- Fixed-rate mortgages
- Islamic Mortgages
- Variable rate mortgages
Many popular banks in Dubai are happy to facilitate you with mortgage options, you just need to select the one that is right for you.
However, mortgage options from private or independent firms are not a bad option themselves. It is the specialization for firms like this to provide individuals with attractive mortgage plans. Even though their terms and conditions are flexible, the rate of interest is higher than banks.
It is best if an individual seeks help or guidance from a mortgage broker in situations like this to get the best plan.
Eligibility Criteria for Mortgage in Dubai
Before you visit a bank or private firm for a loan to purchase Bay Villas by Nakheel, check if you are even eligible for it or not. Look at the eligibility criteria given below:
- Age: For a mortgage in Dubai, an individual must be between 21 to 65 years old.
- Income: A stable income source is a necessity for the mortgage to meet the minimum income requirement. This minimum income requirement varies from one bank to another. However, on average, the salary of a self-employed person in Dubai should range between AED 15K to 25 K.
- Credit Score: One of the key determinants of your mortgage eligibility is your credit score. To determine whether you have a solid history of making on-time loan repayments, banks will look through your credit history.
- Residency Status: To apply for a mortgage, you must either be a resident of the United Arab Emirates or hold a valid UAE residency visa. Although they have different requirements, non-residents are also eligible to apply for a mortgage. Additionally, you can review our guide on how foreigners can purchase real estate in Dubai.
What are Dubai Mortgage Fees?
There are several mortgage-related costs to consider when purchasing real estate in Dubai.
- Mortgage Registration Fee: Usually equal to 0.25% of the loan amount, the Dubai Land Department (DLD) levies fees for mortgage registration.
- The lender will charge you a valuation fee to value the property you are buying. Typically, there is a one-time charge between AED 2,500 and AED 5,000.
- Processing Fee: The lender charges this fee to process your mortgage application. Usually, it falls between 1% and 2% of the total loan amount.
- If you fail to make a mortgage payment on time, the lender will charge you a late payment fee. Typically, it represents between 3% and 6% of the monthly mortgage payment.
Closing Statement
Although obtaining a mortgage in Dubai can be a challenging process, it can be rewarding and manageable with the right information and direction. To get the best offer, it’s critical to investigate and compare various mortgage options, interest rates, and terms offered by different lenders. Since a mortgage is a long-term financial commitment, budgeting and ensuring that you can afford the monthly payments are essential.