What is mortgage pre-approval?
Mortgage pre-approval is a process where a lender evaluates your financial information to determine how much money they are willing to lend you for a home purchase. Pre-approval also demonstrates to sellers that you are a serious buyer and can help expedite the closing process.
What is amortization?
Amortization is paying off a debt over time in equal installments. Part of each payment goes toward the loan principal, and part goes toward interest.
Can I get a mortgage in UAE as a non-resident?
Yes, many banks offer mortgages to non-residents in UAE. However, interest rates for non-residents may be higher than those for residents, and the loan term may be shorter.
What is Debt Burden Ratio and how is it calculated?
Debt Burden Ration or DBR is used by UAE Banks to calculate customers’ loan eligibility. As per UAE Central Bank, DBR ratio cannot be more than 50%. DBR measures the amount of monthly debt payments and credit installments compared to your monthly income.
What is Loan-To-Value Ratio (LTV) and how is it calculated?
A loan-to-value (LTV) ratio is a financial measurement that compares the size of your mortgage to the value or price of the home you’re buying or refinancing. Lenders use it to gauge a loan’s potential risk.
What is the maximum mortgage LTV for non-residents in the UAE?
Non-residents can get up to 75% LTV and up to 10 million AED on their mortgages in the UAE. To know the updated rates, speak to our mortgage advisors today.
What is Islamic Mortgage?
Islamic Mortgage is different from a conventional mortgage. Under Shariah Law it is forbidden to charge interest on a loan, so banks buy the property on behalf of the customer and rent or lease it back for a profit.
What is EIBOR? How do I check the rates?
EIBOR stands for Emirates Interbank Offered Rate, which is the interest rate at which banks lend money to each other. EIBOR rates change daily and can be checked on the Central Bank website.
What is the difference between a fixed and a variable rate?
A fixed-rate mortgage is where the rate of interest on your mortgage is kept fixed for a certain period of time, which is generally between 1-5 years. Once the fixed period ends, you are moved to variable rates. Variable rates, on the other hand, refer to the interest rate that one has to pay linking to 1, 3, or 6 months EIBOR, with a percentage fixed by the bank.
Does my bonus and other allowances count when I am applying for a mortgage?
Yes, if the bonus & housing allowance is guaranteed and mentioned in the salary certificate or contract. Even if the bonus income is discretionary, it can be considered in some cases.
Is it necessary to review my credit report before applying for a mortgage?
Before applying for a mortgage in UAE, all banks will conduct a credit check on the applicant. The credit check is carried out by Al Etihad Credit Bureau (AECB), which is the sole credit bureau in the UAE that maintains credit reports on individuals and companies. Download Al Etihad Credit Bureau app and pay a small fee to obtain your updated credit report.
To get a mortgage in UAE do I need to get life insurance?
Yes, Life Insurance is mandatory for any mortgage in UAE. In fact, most banks offer insurance before lending you the funds to buy the property.
Can I release equity from my property as a non-resident?
Equity release (or cash) from the property is possible even for non-residents. This method requires minimal documentation and allows up to 60% of the property value to be released.
Will my bank charge me a penalty for settling my mortgage early?
It depends from bank to bank, but most banks do charge a penalty for settling the mortgage amount early. The penalty is fixed at 1% of the remaining amount capped at AED 10,000 whichever is less.