The UAE is a dream for many individuals and it has a lot to offer in terms of employment, lifestyle and investment opportunities, making it an ideal destination. Taking out a loan is very daunting and requires research and effort. However with right guidance and a trustworthy lender, you can get the best loan offers with favourable terms and conditions.
Whether you are looking to buy a home, refinance, build an investment portfolio or take out a loan for personal reasons a team of experts always makes it better.
At Emortgage, experienced professionals will assist you through the entire process, right from application to disbursement. From alternatives that give you competitive mortgage rates and flexible terms, to tailored offerings, we make the process hassle-free for you.
That’s all about us, but for now, let’s focus on what is a mortgage loan and everything else about it.
What is a Mortgage Loan?
A mortgage loan is a type of loan used to finance the purchase of a property. This loan is secured by the real estate that it finances and is typically paid back slowly over an extended period of time.
It is typically structured with payments made on a monthly basis, with the total amount owing reduced over time until full repayment has been achieved. Mortgage loans are typically provided by banks or other financial institutions, though private lenders may provide funding for smaller amounts.
Types of Mortgage Loans
There are many types of mortgage loans in UAE :
- Fixed Rate Mortgage Loan
This type of loan typically offers the same interest rate throughout its duration. This can provide a sense of security and predictability when budgeting for your mortgage payments since you know exactly what to expect each month.
- Variable Rate Mortgage Loan
A variable rate mortgage loan is one that changes its interest rate depending on the market. This can be a great option if you’re looking for a lower rate of interest initially, but it is important to remember that the payments may increase over time as rates rise and fall.
- Re-mortgage Loan
Re-mortgage loans are used to replace an existing mortgage loan with a new one. This can be beneficial if there are more favourable terms available on the market or rates have dropped since you first took out your loan.
- Home Equity Loan
A home equity loan is when a homeowner takes out a loan against the value of their home. This loan can be used to finance renovations or other projects, or simply to gain access to extra funds.
Benefits of Taking a Mortgage Loan in the UAE:
- Low-Interest Rates: UAE mortgage loans typically come with low-interest rates, helping you to keep your payments affordable.
- Flexible Payment Options: Many lenders offer flexible payment options, allowing you to make extra payments when you can or adjust the length of the loan term so that the repayment period suits your needs better.
- Tax Benefits: Mortgage loan payments can be used as a tax deduction in the UAE, meaning that you may be able to save money on your taxes.
- Long-Term Security: A mortgage loan can provide long-term security and stability, allowing you to invest in property without fear of losing it if you can’t pay the loan back.
Who can buy property in the UAE with help of Mortgage loan?
Any UAE national or non-UAE national, provided they are a resident of the country and have the relevant documents to prove their residence, can afford to buy property in the UAE. Non-residents may also be eligible for certain types of mortgage loans, however it is important to check with your lender before pursuing this option.
Process of taking a Mortgage Loan:
Taking a mortgage loan is one of the biggest financial decisions you will ever make, and there are many steps along the way. It all starts with finding a lender who can offer you competitive rates. They’ll require that you submit all your financial documents for review, so it’s important to have those ready in advance. Once approved, you’ll need to decide whether you want to lock in an interest rate or not.
Once your loan is finalized, it’s time to close on the house and transfer funds as required by your contract. After closing, the final step is settling into your new home and making payments on your mortgage loan each month going forward.
The process of taking out a mortgage may seem daunting at first but it doesn’t have to be; simply remember to carry out due diligence before signing any agreements, confirm the details of any potential contracts with your lender before closure, and remain up-to-date with repayments and bills once you move into your home. With this in mind and a bit of planning ahead of time, anyone can confidently navigate the process of taking out a mortgage loan.
What documents are needed for getting a mortgage loan in the UAE?
Securing a mortgage loan in the UAE is similar to the process of getting a mortgage loan anywhere else. However, there are some specific requirements that need to be met before a bank will approve a person’s loan request.
The most common documents needed to complete the process include identification such as:
- Residence permits
- Emirates ID
- Proof of salary
- Employment status
- Bank statements showing proof of income and financial stability.
It is important to provide all the required documents in order to minimize delays with the application process. Once everything has been handed over, borrowers will then have their credit history checked, which determines their eligibility for certain types of mortgage loans based on their current individual financial situation.
With all these items gathered beforehand, individuals should be able to efficiently complete their loan application in UAE, aiming for an approval as quickly as possible.
To recapitulate, it can be concluded as knowing the required documents for loan approval, understanding interest rates and payment options, and taking advantage of any applicable tax benefits can all help borrowers get the best deal for their needs.
Obtaining a mortgage loan in the UAE can be a complex process, but with the help of Emortgage advisors it does not have to an intimidating one. Contact us today to see how we can help you.