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FAQ

What is a Mortgage?
A mortgage is broadly defined as a loan obtained to purchase the property. The ‘mortgage’ itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages consist of the principal amount borrowed and the interest which is owed overtime on that principal amount.

How is mortgage affordability calculated?
Most banks will calculate affordability slightly differently, but a general rule of thumb is that they will take only 50% of your monthly income into account when calculating this.
From this 50%, they will then deduct any other credit commitments you have (e.g. car loans, personal loans and approximately 5% of all your credit card limits), to work out your maximum affordability.
They will then carry out a stress test by applying a stress rate of interest which varies between 3.5% to 8% depending on the Bank. The aim of this is to confirm that you will still be able to afford your mortgage repayments if the interest rates were to increase to the test level.

Can I buy a property with my spouse?
Yes, a husband and wife can be joint applicants on a property, even if one of the applicants is not working. As long as the applicant can demonstrate that they can repay the home loan.

Who can apply for a Mortgage?

All UAE residents (UAE Nationals and Expatriates) and non-residents earning sufficient income from either a salary or from running a company (self-employed) are eligible to apply for the Bank Mortgage. The applicant if a UAE resident (Nationals & Expatriates), must be aged 21 and above, and if a Non-resident must be aged 25 and above to be eligible for a mortgage from Bank
What is the maximum number of years I can take a mortgage for?
UAE Residents and Non-Resident can take a mortgage loan for a maximum period of 25 years. However please note, that at the time of maturity the maximum loan tenor should not cross 65 years of age if salaried, and UAE National can take a mortgage loan up to 70 years of age.

What is the maximum amount I can borrow?
Mortgage institutions consider your debt-to-income ratio, which is a comparison of your gross income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or personal loan payments. The mortgage institution also considers cash available for the down payment, credit history, age, etc. when determining your maximum loan amount.
How is the interest calculated on a mortgage loan?

Interest is generated based on your daily loan outstanding balance, following UAE Central Bank directives. The interest that is levied is recovered every month along with your principal repayments as per standard amortization.
When do I start making my monthly repayments?
Your first monthly repayments towards your mortgage loan (EMI) is due one month later from the date of your loan disbursal. Should you have availed a mortgage for an under-construction property, then you have a choice of either paying interest only, or the regular EMI during the construction phase. Your first instalment in this case also will be one month from the date of the first disbursal.

What factors affect mortgage loan payment?
The amount of the down payment, the size of the mortgage loan, the interest rate, the length of the repayment term and payment schedule will all affect the size of your monthly mortgage payment.
What are my responsibilities when applying for a loan?

  • Refuse to sign any blank documents
  • Do not buy property for someone else
  • Be honest in all your answers
  • Do not overstate your income
  • Do not overstate how long you have been employed
  • Do not overstate your assets
  • Accurately report your debts
  • Be truthful about your credit problems, past and present
  • Do not provide false supporting documents
  • Do not underestimate your existing liabilities and obligations
  • Make sure you still have sufficient funds to save for other things you want
  • Please ensure you read and understand everything before you sign
  • Please ensure you keep adequate funds for registration of your Property and mortgage

In the case of resale, ensure you are aware of all the terms highlighted in the MOU. (e.g. MOU validity, buyer/seller responsibilities)

Can the income of more than one person be considered for eligibility calculation?
Yes, the bank can consider this. However, all the people whose income will
be considered will have to be co-borrowers to the loan.

Need a home loan to fit your family & budget?

Grand Alliance Can If your home has brought your family too together, we’re ready with customizable mortgage experience, tools and assistance to finance your next one.