Need help?
Home Loan In Dubai
What is Home Loan in Dubai?
A home loan also recognized as a mortgage, is an amount of money borrowed by a person, basically from banks and companies that lend money. The borrower has to return the loan amount with interest in easy monthly installments or EMIs over time that can depending on the nature of the loan.
Dubai is one of the most amazing cities all over the UAE, and most people want to reside in this vibrant city. Now with the help of a home loan, you can easily buy a house in Dubai. Home loan in Dubai, UAE is something that potential homeowners search for quite a bit when they plan on buying apartments or villas in Dubai. When ex-pats make Dubai their home, they want to buy a property that suits their taste and fits within their financial means.
There are various types of home loan choices that are made to suit each unique condition. You can take home loans to buy homes that are either business or personal. When you take out a home loan, the bank or financial institution allows the property you are buying as security. This signifies that it holds the legitimate right to the home in the case of non-payment.
How to Apply for a Home Loan in Dubai
The process for applying for a home loan in Dubai, UAE is as follows:
- The first step is, you need to check how much money you required to purchase a home in Dubai.
- Then along with fixing the rate of interest comes the term of the home loan in Dubai, UAE going for a variable, or having a fixed rate of interest.
- The most important thing is your need to prepare all the necessary documents required for getting a home loan in Dubai.
- The process of obtaining a home loan often takes a few weeks. Thus, people selecting the same have to obtain advance approval from the banks.
These are some of the important considerations that you are required to examine to get a home loan in Dubai.
Documents Required for Home Loan in Dubai, UAE
If you are a salaried individual
- Application form, authorization letter for bureau check, and consent letter.
- Valid passport or National ID, Emirates ID, and residence visa.
- Original three months bank statement for new clients.
- Salary certificate.
In case you are self-employed
- Application form, consent letter for bureau check, and authorization letter for lending.
- Trade License copy, Chamber of Commerce Registration, Memorandum of Association.
- Original twelve months company and personal bank statements for new clients.
Eligibility Criteria for Applying for Home Loan in Dubai, UAE
- Aged between 21 to 70 years (at loan maturity)
- Minimum monthly income of AED 12,000 to AED 20,000.
- Minimum length of service of six months (if you are a salaried individual), and the minimum length of three years in business (if you are self-employed).
Tips to Consider While Buying a house on Home loan in Dubai, UAE
Currently, the home loan rate of interest provided by banks and other lending institutions is below several years. Anyone can get a home loan in Dubai at a rate of interest of around 7 percent, with a good credit profile. But, before you take a home loan, some important things should be noted. The loan amount that you get will be based on various factors, such as your current salary income, etc. in addition, you require to get a fix on other things including the amount of the house that you are considered to buy.
Here are a few tips to help you while buying a house on a home loan in Dubai, but these can vary based on the circumstances and requirements of an individual.
1- What should be the price of a house
The amount of the house that you want to buy on a home loan should not exceed 5 times your annual income. By doing this, you would be able to serve EMI comfortably without increasing your household budget.
2- The 35/50 rule
When taking a home loan in Dubai, UAE the lender would ask you about your current liabilities like a car loan or personal loan EMI. Banks usually do not pay an amount, at which the EMI will be more than 40 to 50 percent of your monthly take-home pay.
It is good to take a loan where the EMI of a home loan does not exceed 35 percent of your monthly income, while the total EMI like car loans etc. should be limited to 50 percent. In case there is no other loan, you can go up to 50 percent with a home loan. This would also provide you the opportunity to save for long-term goals. You can also add the income of your spouse to increase the eligibility for a home loan in Dubai.
3- Credit Score
Some banks provide a lower rate of interest on home loans to borrowers who have a higher credit score. Your credit profile helps to get a good home loan deal with banks. A credit score of 750 and above is considered a better credit score by many banks and other lenders
4- Opt for a shorter duration
The EMI per lakh, for a similar amount of loan, is less for a long period and more for a short period. But, the cost of interest or interest burden is just the opposite. If you have a longer period to keep EMI down, the overall interest burden will be higher. To keep interest costs low, opt for a shorter loan term.
Don’t Forget to Do Your Calculations
Not for home loans, making calculations and knowing your estimated EMI is essential for any kind of loan, whether it is a personal or car loan. This is because calculating not only help you analyze your power, but also helps you to plan your finance. The use of an online EMI calculator is the most efficient way to perform this.
Frequently Asked Questions (FAQs)
Is it easy to get a home loan in Dubai?
Obtaining a loan in UAE is very easy in case you have all the essential documents needed and complete the eligibility criteria of the bank. Even though some people have all the needed documents, banks reject their personal loan applications.
What is the minimum salary for a home loan in UAE?
You shod also remember that most banks in the country need you to possess a minimum monthly salary of AED 15k to qualify for a home loan.
How much housing loan can I get in UAE?
The amount of a home loan in Dubai is majorly based on how much you earn and your liabilities. Usually, though, a property purchase costs under AED 5 million. The better way is to know from the professional advisors in UAE.
Who can buy a house in Dubai?
In Dubai, overseas ownership is allowed in spots designated, as freehold. Overseas and migrant tenants can obtain ownership rights over property without restrictions.
Do you need a salary to get a mortgage?
You can generally get a mortgage that is 60% time your salary. Although, lenders don’t usually consider your in-hand salary when deciding the loan amount.
How much deposit do I need to buy property in Dubai?
Migrants taking out a residential loan would require a deposit of around 25% in case they are purchasing a property valued at AED 5 million.