A GUIDE TO MORTGAGES & HOME LOANS IN THE UNITED ARAB EMIRATES

Finding a good property in the United Arab Emirates is a tricky task as it involves a lot of financial investment. Many people choose to buy houses with mortgages and loans as a strategic approach to acquiring a property. It's also a beneficial way for people to have their dream house, without having to worry about being affluent. Considering Real Estate is quite popular in the region, many people are adamant to buy through home loans in the UAE.

Another reason for an increasing number of people choosing to buy properties through loans is the abundance of opportunities in the UAE. The developers of real estate are presenting more off-plan commercial or residential projects that are extremely attractive to foreign investors and people looking for a home. Nevertheless, affordability is a big factor in the path of investors due to the rising incomes, living costs, and inflation. Therefore, people who plan on staying in UAE for a long-term period often look for loans and mortgages to opt for a more flexible method of purchasing a property that won't dent their pockets all at once!

The difference between Loans and Mortgages?

It is vital to firstly understand the stark difference between applying for a loan or a mortgage. They both are different and have various conditions from banks.

Loans:
A loan is a monetary contract made between two individuals. The banker pays the client financial compensation in exchange for repayment of the loan including the additional interest.

The debtor accepts to pay back loans and return the required cash according to the conditions of the creditor. Loans take many shapes, such as term loans and revolving loans. Every kind has its perks and downsides and is employed in various funding conditions.

Mortgages:
A mortgage is a form of loan, however, the conditions of the loan are connected to the home or building. A mortgage is a source of financing where the property is used as security, and the mortgage is on the property itself. This implies that as a result of not satisfying repayment obligations, the creditor has the lawful authority to seize and sell the property.

A mortgage is used to buy or refinance a new house or property, as well as to access the equity in an individual's present home for other purposes. Home purchases can be costly, and most borrowers do not have all of the funds required upfront. Therefore, a mortgage is a great way to balance finances while acquiring property over a long period.

Are you eligible for Home Loans in UAE?

Loans are an integral financial element but do have a list of requirements and conditions. If you are looking to purchase a house, villa, or apartment you have to show your bank statements and financial position to prove that loans are the best option for you, and you can return them in time.

However, if you are applying for a mortgage in UAE, you must be an official UAE national or resident. You cannot opt for mortgages if you are a new foreign investor or a visitor. Another requirement is that you must be between the ages of 21 to 65. Any individual younger or older does not qualify for a mortgage according to the government. Lastly, the investor should have a monthly revenue of AED 15K if they receive a salary and AED 25k for self-employed individuals.

However, the minimum salary for loans differs from bank to bank as they all have various policies. Some banks permit UAE residents with monthly revenue of a maximum of AED 8k to use loans for buying a property in Dubai, but it is mostly still altering according to banks. For non-residents, the availability of loans and mortgages is quite rare, but some banks do allow it, especially on commercial units or business ventures!

How to find the best Home loan in UAE?

Finding the best Home loan in UAE is a complicated task, therefore many people instead go to official real estate agencies and brokers to guide them towards the best loan. Considering every circumstance is different, and there are a variety of loan choices: it is important to go through all of them and discuss conditions rigorously to make a well-informed decision.

For this part, have no worries as Inspire Real Estate is here to the rescue. The popular real estate agency is full of expert individuals who are ready to give great advice according to your preferences of property and loan conditions. If you are worried about making the wrong decision, contact them and be at ease!

Home loan calculator in UAE

There are many loan calculators online which can digitally let you know the required payments including interests and other factors. One prominent factor includes the home loan interest rates in UAE. Currently, the interest charges vary from 2.99 to 5%. The prevailing tendency of the real estate market estimates that the interest rates will slowly decrease. They are currently lowering too, and will further reduce in coming years.

The real estate market is constantly changing, and fixed rates are usually only viable for two years. In most cases, after two years there is a revision of charges. A fixed-rate deal for five years is also available.

That rate is often found to be on the higher side, approximately 5%. Variable interest rate mortgages are another choice for house loan UAE candidates.

In the end, money is tough to estimate and many people cannot predict their financial budgets in the long run. Even for experts budgeting accurately is nearly impossible. However, if you have a good grasp of the market and believe that interest rates will fall in the future, variable interest rates are an ideal option. Regardless, anything that requires money comes with risk, and within the dynamic real estate market, it is always a safe thing to consult an expert to find you a great property, and loan too!