While the statistics show that the majority of property purchases in the emirates are done in cash, but definitely the enduring low- interest rate entices the end-users more, as with this they can consider the option of offsetting rising rents with mortgage installments. Since the mortgage is a long- term commitment, it is essential to comprehend the complete procedure and to know how you can fit in, to get the right mortgage.

 
Mortgage processing involves a sequence of steps that are completed within a period of two to three weeks. It is a very extensive and elaborate procedure where the borrower has to adhere to the steps cognizant by the lender. Banks are offering mortgage against both ready and off-plan properties, but it is also important to understand that certain banks don’t finance all developments or developers. The maximum term of the mortgage is 25 years and can reach a maximum Loan to Value of 80% the market value of the property.

 
The market offers competitive interest rates so it’s worth doing your due diligence. Dealing directly with one bank can limit your options as mortgage offered by different banks are not all the same. Hence engaging the facilities of an independent mortgage consultant might be the right way to secure the favorable mortgage terms. The most  important factor to consider is the difference between a fixed rate and adjustable rates. Generally, most of the financiers offer a loan based on internally-set rates or Emirates interbank offered rate (EIBOR). Once you are ready to go for a mortgage, with your mortgage broker determine how much you can afford. They would review your credit requirement and advice you to provide required documents. Your employment and financial net worth are the formative factors for a mortgage approval.

 
Get the Pre-Approval

 
A pre-approval is the very first step of mortgage processing, where the lender verifies the borrower’s information and documentation to determine exactly how much they can lend to the borrower. The determination and loan amount are based on income and credit information provided by the mortgagor. The pre-approval process generally takes three to four working days. Most pre-approval letters are good for 30 to 60 days.

 
Property Search and MoU sign

Now with the pre-approval you get a fair idea about your price range and with this you can start your home search. Once the property is identified, the buyer and the seller sign a Memorandum of Understanding (MoU). Generally, both parties issue a 10 per cent cheque of the agreed sale price, in the name of each other and are kept with real estate broker office as a commitment towards the deal.

 
Property Evaluation

 
To get the final mortgage approval letter from the bank, the buyer 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 execute the market valuation of the proposed property. The property valuation fees vary from AED 2,500-AED 3,000 and the process takes two to three working days. Upon obtaining the market valuation report bank would prepare the final offer letter and contracts as per the agreed terms and conditions. While signing the loan agreement the buyer may have to give security cheques to cover up the monthly installments and the whole loan amount. The buyer would also sign the life and property insurance documents and standing instructions to debit the premium as per agreed terms by the lender. The bank will ideally open a bank account for the mortgagor from where it will debit the EMIs every month.

 
NOC (No Objection Certificate) from the developer

 
Both parties need to apply for the NOC at the developer office for title transfer and mortgage registration at the Land department or elsewise, at the developer office if is the sale of the property has happened in Abu Dhabi. Once the seller pays off all his pending service charges, NOC is issued by the developer to execute the transfer.

 
Property Ownership Transfer Appointment 

Bank representative will take an appointment in the trustee office of the Dubai Land Department (DLD), and would carry the required document and bank draft to process the transfer at the land department. Along the representative both the buyer and the seller will also have to be there at the DLD office, once the Land Department officer verifies all the documents, the buyer gives the transfer fee which is 4 per cent of the selling price of the property and another 0.25 per cent of the loan amount as a mortgage registration charge. They both sign the official document of transfer and the buyer pays AED 4,000 as trustee fees to complete the transaction. Finally, the title deed is issued, wherein the bank keeps the original and hand-overs the attested copy to the buyer. Likewise, the transfer of ownership of the property in Abu Dhabi happens in the developer office after paying the required fee to the developer. And the new Sale and Purchase Agreement is issued under new buyer’s name.

 
Thus, the mortgage process is completed and the buyer gets the keys!