Unlocking eSignature Licitness for Mortgage in UAE

How to eSign a document: eSignature licitness for Mortgage in UAE

hey guys F here from inside realy and today I'm going to talk to you about mortgages and everything related to mortgages in the eoe specifically in Dubai and cover all the frequently asked questions that we get uh from our clients if I'll miss anything you are more than welcome to write in the comments or ask us directly about anything related to UAE real estate and mortgages in particular in this case so the first question that I want to start with and this is a question that we get asked a lot is can a non-resident get a mortgage in UAE and the answer to that is of course yes even if you're not a resident in the UAE you can get up to 50 sometimes 60% of the property price mortgaged um all you need to do is to meet certain eligibility requirements set out by uh local banks however if you are a resident you can get up to 80% of the property price financed and uh usually the interest rate for your mortgage is going to be slightly lower but I'm going to get into details of uh that uh first of all let me tell you about the types of mortgages available in UAE so we have two types of mortgages available for uh consumers one is a conventional mortgage and the second one is an Islamic mortgage so what's the difference between the conventional mortgage and Islamic mortgage the main difference is that during the period of your mortgage if it's a conventional mortgage then the property belongs to you and the mortgage is registered under this property with uh a specific bank in the case with Islamic mortgage the property belongs to the bank and you supposedly rent the property from the bank during your mortgage tener and once you pay off the mortgage uh obviously you get uh the property transferred to you in your title deed that is the main difference uh in my op opinion it is just um down to personal preference if you have certain um religious uh requirements that do not allow you to go for a conventional mortgage then obviously a Sharia compliant mortgage is a great option in that case now let's talk about the eligibility what you need to do to be eligible to actually get a mortgage in the UAE of course the first thing that the banks look at is your income you need to have a minimum salary of 15,000 dams equivalent to 15,000 durhams which is roughly around $4,000 uh us and for each 15,000 dams that you receive as salary you can get up to 1 million durhams of mortgage which is roughly around 275,000 US dollar another question we get asked a lot is credit score and who's monitoring the credit score in the UAE so the credit score is monitored by EAD credit bureau and you can actually check your credit score online and you can have a detail report available to you for just a few dollars um it actually looks at your income as well as all the bills that you could potentially have in the UAE which is your uh phone bills or Internet bills so make sure that everything is in order um so that you can have a high credit score and be eligible for a mortgage in uh UAE or uh Dubai people ask us if you could sell the property while there is a mortgage on it um and the answer to that of course is yes and you can have two potential scenarios first of all your buyer could be a cash buyer in that case your buyer needs to buy you out from the bank the bank G needs to give you a document that confirms that the mortgage has been settled in order for the transaction to move forward and for you to transfer your title to somebody else uh and there could be another question which is uh your buyer could also be a mortgage buyer and potentially with another bank so two Banks need to settle this mortgage between each other and then you need to get the related paperwork uh and only then you can continue with the transaction and you can transfer your title to another buyer but in both cases of course this is uh possible we often get asked if you could get a mortgage on an Off plan property and the answer to that is yes as long as there's 50% construction completion on a project and in most cases if it's a reput able developer then the banks are considering these cases and you could actually apply for a mortgage uh worst case scenario you could get a pre-approval which is uh also valid for six month and you would be able to understand that you are eligible for a mortgage even if it's an under construction property and by the time the property is completed for example you could uh carry on with the mortgage and the bank could pay off the developer so it is very individual if you have a case like that let us know and we will will definitely look into it and get you the best advice on what you can do in terms of uh financing an Off plan property now coming back to pre-approvals because it is also one of the most uh important topics and uh you usually get asked a lot by real estate agents whether you already have a pre-approval for a mortgage that helps us and uh the buyers also to actually have a very clear understanding and vision of what the buyer is eligible for and it Narrows down the uh the circle of the properties that we look at and we short list so it makes the whole process uh much easier and it's advisable to actually go for a pre-approval before you start looking for properties in that case uh like I said you will have a very clear understanding of what you're eligible for and then you can choose the best property for you within uh the limits that are set out by the bank uh let's talk about the fees I think one of the most important things to know is how much a mortgage is going to cost you so the fees included are usually broker fees sometimes you could avoid broker fees uh by choosing the right broker which has a lot of Partnerships with the banks and the fees are covered by the bank but in general it could be between 10,000 dhams to 1% of the mortgage value uh for uh advice on which mortgage to take uh another fee related to a mortgage is a government fee that you pay to register your mortgage with duband department and that is 0 25% of your mortgage value so for example if the property price is 1 million dams uh and you get uh 500,000 mortgage then you pay 25% of the 500,000 that you're financing with the bank and now the most important thing how much is it actually going to cost you so the mortgage rates at the moment are between 5 to 7% uh per anom and that could vary depending on the uh borrowing rate of the U Central Bank and the rates that Banks have on their own mortgages it could be a fixed interest rate for example some banks offer you like a 5% fixed rate for 3 years and um some banks just follow the emir's um Central Bank borrowing rate and then their own rate so you need to look into it when you apply for a mortgage and choose whether you want a fixed uh rate or a fluctuating rate uh whichever is basically better uh for you can you settle your mortgage early and without fees uh the answer to that would be yes you can settle your mortgage early but you unfortunately won't be able to avoid the fees so each and every bank has its own expectations towards making enough profit from you as a client and obviously if you settle your mortgage early then the bank doesn't get the profit that they're initially intended and there's actually such thing uh called uh loan to interest triangle and this is something you need to look at when you're applying for a mortgage you need to to understand what is the percentage of the interest rate and the mortgage what's the ratio between those percentages that you're paying when you start your mortgage because the banks most of the time would want to receive more interest during your first years of mortgage as compared to the loan itself let's talk about settling your mortgage early whether if it's possible and if you could avoid paying extra fees for early Mortgage Settlement now it is possible to settle your mortgage early However unfortunately you won't be able to avoid the fees because each and every bank has its own expectations on how much money they would make uh while lending you uh money so basically what they want to do is they want to charge more of Interest towards the beginning of your mortgage tenor uh compared to the loan itself so what you need to look at is the loan to interest ratio uh during your payments and you need to ask your mortgage advisor how much much interest you're going to be paying and how much mortgage itself you're going to be paying During the period of your mortgage to make sure that you pay more mortgage less interest but if you would want to settle your mortgage early the banks would charge you usually around 1% of the remaining mortgage value to terminate your mortgage early but again like I said and this is very important you need to make sure that you have paid a certain amount of your interest uh and a certain amount of your mortgage uh now let's talk about an option of refinancing your mortgage or supposedly if you have a mortgage active with a certain bank at a certain rate you could potentially get an offer from another bank to buy out your mortgage and give you a lowest a lower interest rate that is possible but that also depends of course on what's happening with the global economics and the uh UA Central Bank uh borrowing rate there's an Financial instrument that I want to to mention this is something we use a lot with our investors uh it's called Equity release if you already have a property in Dubai that you've paid for and it is yours uh what you could do is you could release up to 65% of the property value um from the banks so you could borrow 65% of the price and they can give you this funds as cash towards your bank account so you could use it as you wish but what we usually do is we use this money to buy another properties for our clients and then rent them out and the rent could cover the mortgage and you could potentially uh get a property for free that is possible and if you want to know more obviously let us know and we'll explain you how this works people also ask us how many mortgages can you get can you get more than one mortgage and the answer to that is also yes but that of course depends on how much money you make and how much uh um eligib ability you have and what is your liabilities what are your liabilities with the bank so if you don't have uh liabilities and if you earn more than 15,000 for each 15,000 you can get up to a million of mortgage and you could multiply that depending on your income age restrictions you need to be at least 21 years old to be eligible for a mortgage and up to 60 you could uh Finance your property but the formula is 60 minus your current age is the tenure that you can get a mortgage for but the maximum tenure is 25 years um and this is a very sensitive subject um I've been asked that by my clients a lot what happens if you do not pay your mortgage now I would of course obviously advise you to always make sure that you pay your mortgage on time but just in case something happens uh God forbid uh and you were not able to continue with payments obviously the banks the first thing they would want to do is to get in touch with you and to contact you and to understand your situation and to maybe try and find some common ground where you could potentially uh rediscussed mortgage maybe uh break down your payments into smaller payments but uh to find some sort of a solution that works for both you and the bank if you are not able to find a solution then the bank would start the legal proceedings to recover their money obviously that includes uh court and uh that could potentially include uh auctioning off your property selling it off at a lower rate po potentially recovering some of the amount that you've paid uh if that is possible if not then obviously you will be uh losing all your money and the property is going to be forfeited and uh sold by the bank to recover their money all right I hope I covered everything related to getting a mortgage in the UAE if I've missed something or if you have any specific question please write Us in the comments or send us a direct message and please subscribe because we're going to be posting a lot of interesting content about UAE and its real estate market thank you very much for watching and have a good day