Property Shop Investment FAQsProperty Shop Investment FAQs

It is a form of loan granted by banks for the specific purpose of buying or constructing a property, regardless of the property type.

The loan is granted by the bank according to its applicable policies, with a profit/interest margin on the granted amount.

A mortgage advisor is an independent agent, separate from credit agencies. Their role is to provide clients with solutions related to all types of real estate financing.

When the client agrees and decides to move forward with an offered solution, the mortgage advisor coordinates and collects the required documents, then communicates and follows up with the bank throughout the mortgage process until the service is successfully provided to the client.

The main reasons are the wide experience the mortgage consultant has acquired over the years and their continuous monitoring of new and updated credit policies issued by the banks operating in the market. These help the mortgage advisor obtain preferential offers that banks do not announce publicly.

In addition, the mortgage advisor's experience and knowledge of the real estate market is an extra advantage when it comes to guiding the client towards the most suitable projects for their financial capabilities.

In general, there are many different types of mortgage products, and the banking sector in the UAE offers several categories, including:

• Mortgages with different plans for citizens and residents
• Construction and development loans
• Mortgages for commercial purposes
• Land financing

Yes, there are basic steps to take when you want to obtain real estate financing.

Your first step should be to contact a mortgage consultant to identify your needs and analyze your financial capabilities.

Based on the information provided, they can offer a set of solutions and direct you to the best option. Your advisor will then approach the bank and obtain the initial approval for the mortgage.

This approval is an important step in determining your purchase direction in terms of location, area, type and so on.

In addition, real estate developers take the purchase decision seriously when they are presented with a pre-approval.

After the property is selected, the consultant arranges the required property documents from the developer and the documents from the client, starts the bank process and follows up regularly to make sure there are no delays. They also explain all the credit details to the client, such as the monthly installment, the type of interest/profit resulting from the financing, commissions and insurance fees.

Your advisor's role in the mortgage ends when all procedures with the bank and the real estate developer are completed and the property is registered.

There are several stages to obtaining a mortgage, and the time each stage takes varies from one bank to another and according to the client's situation. In most cases, the process takes from 3 weeks to a month from the time the property is selected. A mortgage advisor can reduce this period to a minimum through their connections and relationships with the bank, and in most cases obtain an initial approval at an early stage.

In the UAE, there are two main types of mortgages: Islamic real estate financing and commercial (conventional) real estate financing.

The main difference between the two is how the bank calculates its profit from the financing.

With Islamic financing, the bank calculates its profit using the Murabaha system or the leasing system, while with commercial or conventional financing, it is calculated by setting an interest rate, either fixed or variable, over the term of the loan.

You can contact our mortgage consultants for insight into how these are calculated.

A group of banks operating in the UAE market offers a range of construction and development financing solutions as part of their mortgage services.

Although the conditions for this type of financing differ from financing for ownership, the banks that provide it set simple, uncomplicated conditions for most of their clients.

Contact one of our mortgage consultants for more information.

The age limit for mortgage services depends on the applicant's status, and on whether they are a citizen or a resident.

In both cases, the applicant must be over 21 years old. At the date of the last installment, the applicant's age should not exceed 70 years for citizens and 65 years for residents.

Yes. A group of banks operating in the UAE market has developed solutions and policies for non-resident clients, with a few additional requirements that clients can easily meet.

Contact one of our real estate finance consultants to answer your inquiry in this regard.

You need to evaluate the offered solutions against your current and future financial capabilities.

This is considered one of the most important stages of the real estate financing process.

After that, always try to evaluate each solution as a whole.

Do not look only at the interest rate or the financing limit; try to analyze the costs of the credit from all sides.

Many banks leave it to the client to decide whether to transfer their sources of income to the bank. However, transferring your sources of income gives you preferential privileges in the financing.

Therefore, our consultants advise clients to transfer their sources of income to the bank so they can obtain the best financing solutions.

It is the share of the client's income that remains available after their existing obligations, and it determines whether the client can get a loan.

To illustrate this ratio, here is a simple example:

A client's total monthly income is AED 50,000, and their financial obligations are as follows:

• A car loan with a monthly installment of AED 2,500.
• A personal loan with a monthly installment of AED 2,000.
• A credit card with a revolving credit limit of AED 50,000 (5% of the card limit is counted as a monthly obligation).

Based on the above, the client's total obligations are 2,500 + 2,000 + 2,500 = AED 7,000.

The obligations as a percentage of total income are (7,000 / 50,000) × 100% = 14%.

The bank allows the client's total monthly obligations, including the mortgage installment, to reach 50% of their total income.

Therefore, in the example above, the client can get a loan with a monthly installment of up to 36% of their income, i.e. AED 18,000 per month.

Your mortgage advisor then calculates the loan amount you can obtain, taking into account your age (to determine the loan term) and the interest/profit rate.

Contact one of our consultants to calculate your financial ability to get a mortgage and the amount of financing you can obtain.

Financing solutions are offered to clients with many different sources of income, and business owners can obtain real estate financing products under conditions designed to suit their sources of income.

You can contact one of our consultants to clarify all aspects of this topic and learn the requirements for obtaining your mortgage.

It is the bank's acknowledgment of its preliminary approval to grant the client a mortgage.

This approval is not binding on the bank until the client completes all the requirements for obtaining a mortgage according to the bank's terms and conditions for this type of credit.

The approval is usually valid for 60 days from the date the client is informed of it.

Its importance lies in letting the client know the financing limit within which they can buy a property. Real estate developers also see it as an indicator of the client's seriousness about buying.

Yes, there is an agreement that must be signed between the client (the buyer) and the real estate developer (the seller).

This agreement is the Memorandum of Understanding (MOU) between the two parties. It includes the property details, the agreed value, the payment terms, and the details and dates of the payments.

It is an important required document in the real estate financing transaction.

Our consultants always study these agreements and review them with you to verify their details before you sign.

Yes, according to several bank policies in the UAE market, provided that the bank receives detailed supporting documents for these sources from your employer, along with statements from the bank they are transferred to.

Contact our consultants to explain this in more detail.

Banks set the credit limit for real estate financing programs based on several factors, the most important being the value of the property and the borrower's status.

This is shown below:

• Property value of AED 5 million or less: 85% of the property value for UAE citizens, 80% for UAE residents.
• Property value of more than AED 5 million: 75% of the property value for UAE citizens, 70% for UAE residents.

Yes. The credit policies of banks operating in the UAE market specify a basic set of documents that must be provided to the bank to obtain a mortgage.

These documents vary according to the client's status (UAE citizen or UAE resident):

• A copy of the client's passport with the residence visa, and Emirates ID.
• Proof of the source of income.
• Bank statements for all of the client's active accounts.
• Proof of residential address, such as a tenancy contract or an electricity and water bill.

Several additional documents may be required depending on the client's status.

These concepts all refer to the same thing: the profit the bank earns from financing the client.

How this profit is defined varies with the type of financing, Islamic or commercial (conventional).

Yes, it is a prerequisite according to the instructions of the Central Bank of the UAE, but this insurance is provided by the bank with the loan.

In other words, the client is not required to provide this type of insurance themselves.

No, it does not limit your freedom, as long as you remain committed to paying the installments due on time.

There are some fees for getting a mortgage. Their value and percentage are set by each bank, and they differ from one emirate to another.

You can contact one of our advisors to clarify these fees depending on the lending bank.

Yes. All banks in the UAE, per the instructions of the Central Bank of the UAE, examine the credit capacity indicators of every client who submits a credit application of any kind.

This is done through the Al Etihad Credit Bureau platform.

Yes, you can. In some cases our consultants recommend it to raise the financing limit, if the main applicant has a relatively high debt burden that prevents them from reaching the limit needed to buy a specific property.

We recommend contacting one of our consultants for detailed information in such cases.

According to the instructions of the Central Bank of the UAE, this is not allowed.

However, banks allow clients to take a personal loan to pay the fees incurred when buying a property.

Our consultants offer a range of solutions for such cases.

This depends on the purpose of the extra payments and the size of the increase.

For example, if the purpose is to transfer the loan from one bank to another, many banks charge additional commissions.

If the extra payment is less than 50% of the outstanding loan balance, many banks do not charge any commission.

Yes, it is possible under the credit policies of some banks.

We recommend speaking with our mortgage advisors, who will provide the most suitable solutions for your situation and the amount of credit required.

A mortgage is a loan that enables you to buy a property or land.

The bank lends you money at interest and takes the property as security, on the condition that the borrower repays the bank.

If the borrower fails to do so, the lender can take possession of the property.

UAE residents and non-residents, both salaried and self-employed, can apply for a mortgage.

The usual minimum monthly income required is AED 15,000.

The down payment is the initial amount of money you must pay for the lender to provide you with a loan.

In the UAE, local home buyers typically make a down payment of 20% of the property price, and expat home buyers 25%.

This applies to both ready and under-construction properties.

For commercial properties, the down payment is 35% to 40%.

This depends on your current income and existing liabilities, and it can vary from bank to bank.

In the UAE, typical rates vary between 2.99% and 7%.

PSI works with over 20 banks in the UAE that offer as many as 250 different mortgage products with discounted rates, to get you the best home loan deal.

Banks typically charge the applicant 0.5% as a processing fee.

The valuation fee is usually AED 3,000 and covers an inspection of your property so the bank knows whether it is sound enough to lend on.

Our quick and easy mortgage calculator gives you an idea of the total mortgage payment for your property.

You only need to enter the property value, the down payment percentage, the loan term and the bank's interest rate.

Please note that these figures are only a guide based on the information provided.

Reduce or close your credit cards, especially the ones you do not use.

Yes, they can.

However, the terms for non-residents are different and the rates may be slightly higher.