How easy is it to get a mortgage in UAE?
It is important to establish trust with your lenders.
As thousands of people move to the UAE to make a future in this land of opportunities, the idea of buying a property gains prominence. It’s definitely a big decision to purchase property in a country where you’re an expat and finding your dream property here is not difficult. But getting a mortgage to purchase a house involves some challenges as an expat.
New to the UAE
For approving any kind of loan — be it a personal loan, mortgage loan, etc. — the banks are very particular about certain things, like length of employment service and the time you’ve been living in the UAE. Applications typically don’t go through if you’ve just landed here. The minimum length of time since you have relocated to UAE should be at least six months to one year. Other than the time, financial institutions check the length of service at your current employment which needs to be minimum of six months.
If you have ever applied for a loan in the UAE, then you will be well aware of one requirement — your employer company must be listed with the bank to mitigate risks of lending. While government sectors are listed with the banks and so are most multinational companies, some companies are not. So even if a mortgage applicant has a good credit history and meets the eligibility criteria on the loan, if the employer is not approved by the bank, it is a disappointment. In the case of self-employed individuals, the length of business is considered, which is supposed to be more than two to three years. Also, if you have a salary/savings account with the bank you’re applying for a mortgage in the UAE, it increases the chances of approval.
Each bank in the UAE has a minimum monthly income/salary criterion. The criterion is different for expats and nationals. The minimum monthly salary/income required for a mortgage for an expat is about Dh10,000. At some banks, the criteria is different for self-employed and salaried individuals as well. Most banks approve adding the spouse as the co-applicant. If the co-applicant is a salaried individual, your application can meet the eligibility criteria easily. This will also improve the chances of loan approval.
You will require the same documents for a mortgage as other nationals and expats. Expats are supposed to provide their passport and the UAE resident visa for verification and a photocopy of each along with the other required documents. These document include your Emirates ID, salary certificate, trade licence (for self-employed), bank statements for the last six months. As long as you have these documents, this is not going to be an issue.
Your credit history plays an important role while applying for a mortgage in UAE. Your credit score would be derived from your history and includes every financial detail like incoming and outgoing cash flow and history of loans. Financial institutes reject mortgage applications if the credit history is poor or nonexistent. It is recommended to start building your credit history by getting a credit card and paying the card bills on time as soon as you’ve moved into the country. This is important if you think you’ll need a mortgage loan in the near future.
You will require extensive planning that you should start at least two to three years prior to an actual purchase. When you’re an expat and apply for a mortgage, the financial institutions in the UAE are extremely supportive in granting loans. This is true especially if you meet the basic criteria, mostly related to diligent financial habits, your place of work and financial history. If you take care of these basic requirements it will establish trust with the lenders and your mortgage loan will get approved.
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