How to Buy a House through a Bank in the UAE ?
The United Arab Emirates attracts a large number of tourists, visitors, and residents seeking employment in various companies and institutions. Given the UAE’s prestigious global standing, it is considered a dream destination for settling and investing in real estate. In this context, houses emerge as one of the most sought-after properties by residents and citizens of Dubai.
This article provides comprehensive answers on how to buy a house through a bank, which can be done either by cash payment or through a bank loan. If you decide to purchase a house through a bank, it is essential to understand the details and intricacies of this practical experience to ensure you acquire the home you aspire to, whether you live alone or with your family.
Main Documents Required for a Mortgage Loan
The documents required for a mortgage loan may vary slightly from one bank to another, but the primary ones are generally the same. Here’s a list of the essential documents you should know and prepare before starting the application process.
For Employees:
- Application Form: Fill out the mortgage loan application form.
- Proof of Property Reservation (if available): Contract or receipt proving property reservation.
- Disclosure of Down Payment Source: Provide proof of the down payment source.
Copy of Valid Passport, Emirates ID, and Residency Visa. - Bank Statements: Last 6 months’ bank statements.
- Salary Certificate Addressed to the Bank: Issued within the last 30 days or less.
- Salary Transfer Letter (if salary will be transferred to the bank).
- Details of Existing Loans and Liabilities.
For Business Owners:
- Application Form: Fill out the mortgage loan application form.
- Proof of Property Reservation (if available).
- Disclosure of Down Payment Source.
- Copy of Valid Passport, Emirates ID, and Residency Visa.
- Personal and Company Bank Statements for the Last 6 Months.
- Auditor’s Report: Last two years’ auditor’s report (for larger loans).
- Valid Trade License: Or articles of incorporation and ownership certificates.
- Details of Existing Loans and Liabilities.
Benefits of Getting a Mortgage Loan
Obtaining a mortgage loan has several benefits, including secure real estate investment and the primary advantage of acquiring a house quickly without needing to pay the full price upfront. Here are some of the advantages:
- Financing Covers a Large Percentage of the Property Value: Up to 85% for citizens and 80% for residents.
- Flexible Repayment Periods: Options for repayment periods up to 25 years.
- Greater Savings on Interest: Discounts on interest when linked with a current account.
- Post-Sale Services: Continuous support after obtaining the loan.
- Partial Repayment Option: Ability to make partial payments at any time during the loan period.
How to Apply for a Mortgage Loan for Expats
Most UAE banks offer mortgage loans to both citizens and expatriates, provided they have sufficient income. The application steps include:
- Choose the Right Bank: Research and select a bank that offers the best terms for you.
- Open a Bank Account: Open an account with the chosen bank.
- Transfer Your Salary: Transfer your salary to the bank if required.
- Search for a Suitable Home: Look for a property that fits your income level.
- Submit the Required Documents: Provide all necessary documents to the bank.
Wait for Initial Approval: Await the bank’s preliminary approval. - Verification Process: The bank will send a committee to verify the provided information.
- Contract Signing: Upon final approval, sign the contracts in the presence of bank officials and the property owner.
Freehold Areas for Expats
In Abu Dhabi, there are nine freehold areas including Yas Island, Saadiyat Island, and Al Reem Island. In Dubai, prominent freehold areas include Arjan, Al Barsha, Dubai Marina, and Dubai Investment Park, Dubai land.
Mortgage Loan Amounts
Mortgage loan amounts vary between banks but generally cover up to 80% or more of the property value. Loan amounts can reach up to AED 50 million in some banks.
Types of Loans in the UAE
- Housing Loans for UAE Nationals: Conditions include a minimum monthly salary of AED 10,000 and repayment periods up to 25 years.
- Housing Loans for Expats: Conditions include a minimum monthly salary of AED 15,000 and repayment periods up to 25 years.
- Annex Loans for UAE Nationals: For building an annex on the parents’ property or mortgaging it to purchase a private home.
- Green Home Loans: For UAE nationals to buy eco-friendly sustainable homes with similar conditions to regular citizen loans.
Buying a house in the UAE through a bank is an excellent option for those looking to own and invest in real estate. By following the appropriate steps and preparing the required documents, you can streamline the process of obtaining a mortgage loan and enjoy the benefits of living in the UAE.