3 years back I bought an apartment in Abu Dhabi and now have AED 1.8 Million outstanding amount, I feel that I am paying higher interest rate to my current lender, can I switch my mortgage to another bank and what are the costs?

Yes, surely it would be a smart decision to move to another lender if you really paying high-interest rates. And as per the UAE Central Bank mortgage regulation banks have homogeneous exit fees, they charge only 1 per cent of the outstanding principal balance or AED 10, 000 whatever is less, to fix the amount. It would be prudent to consider a valuation of your existing facility and check with lenders to refinance and get the better rate or some more flexible product. Most banks in Dubai offer reduced or zero processing fees in the event you want to buyout the existing loan.

In your case, you need to check the current market value of your property as the new lender will lend in line with the Central Bank guidelines against the current market value of the property. So if your existing mortgage loan outstanding is higher as per lending parameters than you would have to contribute extra from your funds to settle the difference, however if it’s falls below then you can easily move out to another bank by only paying the settlement charges.

The Buyout home buying process is moreover the similar to your original mortgage process since you come across comparatively the same deeds and almost the same time duration. And definitely it works to significant savings on the life of your homeloan, so you can surely consider switching your existing mortgage to another bank and the actual cost may vary from bank to bank, apart from settlement clause.

I bought a property in Dubai and secured 70 per cent mortgage on the property. Now I am planning to sell it off. Should I finish the mortgage before property transfer or the buyer bank will do it? What is the complete property selling procedure?

When you want to sell the property it depends on the type of buyer you have, the buyer might be interested in paying in cash and registering the property in their name. However, if the buyer wants to avail mortgage finance on your property then the buyer’s bank would settle your current liability in your bank.

So as per your case the buyer wants to avail the mortgage finance on your property then buyer ideally gets the pre-approval from the bank. Here the seller (you) needs to provide the copy of title deed or sale and purchase agreement issued by the developer along with floor plan and signed MOU copy to the buyer’s bank to execute the market valuation of the proposed property. Upon receiving the final approval after the assessment of the property, the seller needs to apply for the liability letter and provide the same to the buyer’s bank to settle the liability. Upon attaining the required original property documents, both parties need to apply for NOC at the developer office. The bank would pay the balance amount if outstanding to the seller at the time of the transfer in the trustee office of the land department and new title deed would be issued in the buyer’s name and would be with the bank until the settlement of the loan. This entire process might take around 10 to 12 working days to execute.

So, once the deal is confirmed, sign the MOU and provide all the papers to the buyer to do the rest of the process and they will settle your amount. Good Luck!

I am working and my wife is self-employed and our combined income is AED 70,000 per month. We both don’t have any liabilities. How can we avail mortgage combining our income? What are the documents required? How will we pay the EMIs, it will be through whose cheques: mine or my wife’s?

This is a very uncommon question, and most of the people get confused, but here your case is strong enough. Ideally, in this case, both the applicants can apply the loan together to enhance the homeloan eligibility amount. However, since mutual incomes are being considered, therefore, both parties are equally liable to mortgage and for the installments towards to the loan. Considering, two different modes of incomes the documentation requirement would be as per applicable for salaried and self-employed to qualify for loan eligibility parameters. Bank would do due diligence in the assessment of the incomes of the buyers, also the tenure of the loan would be calculated on the age of the person who is older, if you want to apply for the maximum tenure.

The bank in Dubai would consider both incomes after identifying profits from your wife’s income on the monthly basis and your monthly salary. The bank will open the joint bank account for the mortgage. The bank will debit monthly installment of the loan from that account. So, definitely you can apply for the joint mortgage and the process and documents will be unlike to single mortgage holder but the loan eligibility will be decided after calculating both of your joint income.

I am working in the US and my monthly salary is USD 8,000. I am looking to get a mortgage for the offplan project in Dubai. I wanted to find out what my options are in terms of getting a mortgage in Dubai. Please, advice.

Definitely, the banks do mortgage off-plan projects in Dubai, but not every lender offers such facility to the client. Since selective banks are there in the marketplace, the preferences for finance options are constrained. But banks are pleased to provide mortgage support to properties registered with the master developer, with exclusions to some developments launched by private developers also.

To qualify for such mortgage facility client needs to contribute the initial 50 per cent of the down payment towards the property, thereafter the remaining amount of 50 per cent bank would pay on their behalf to the developer as per the payment schedule in the developer’s escrow account.

Considering the higher level of risk of off-plan project completion, the Central Bank mortgage regulations have set the maximum LTV (Loan to Value) of 50 per cent for mortgages on property being purchased off plans regardless of purpose, value or category of purchaser. The clients must be conscious of the detail that once the payment has been done to the developer, the bank would start charging the interest on the paid amount. Most banks have higher interest rate during the construction phase which would there on adjusted to a variable rate thereafter the project accomplishment.

I am moving to Dubai with my family in September this year. I wish to purchase an apartment in Dubai. Can you please advise me about the mortgage process and down payment requirements?

Definitely, you can purchase an apartment in Dubai as a non-UAE resident and can also avail the mortgage facility here. Currently, banks in Dubai are financing up to 70 per cent of the property value with profits rates from 4.99 per cent to 5.5 per cent and the maximum term of the mortgage is 25 years. The facility is available for clients who are willing to provide all documentation from their home country based on the nature of income they generate since the financial documents would differ accordingly. Also, if the client is willing to pay up to 50 per cent of the property value then with the modest credentials we can process the loan application which would be fast and hassle free.

After the initial assessment is conducted on the provided credentials, the bank would offer pre-approval. Subsequently, you have to allocate the property keeping in line with your down payments competencies and transaction cost to execute the transfer process. After the property valuation is done of the selected property, the bank would prepare the final mortgage offer letter and contracts as per the agreed terms and conditions. The complete processing involves a sequence of steps that are completed within a couple of weeks.

As Published on August 8, 2015 in GN Properties