12 Essential Mortgage Questions to Ask Before Buying UAE Property

Last Updated on July 10, 2024 by Vadim

Planning to buy property in the UAE? Ensure you make informed decisions by asking these crucial mortgage questions recommended by the UAE Central Bank.

Understanding Mortgages in the UAE

A mortgage is a loan typically used to finance property purchases. The application process requires meeting specific criteria such as:

  • Minimum credit score
  • Down payment
  • Income level

Additionally, be aware of potential fees like:

  • Legal fees
  • Appraisal fees
  • Administration fees
  • Inspection fees

12 Key Questions to Ask Your Bank

Loan Repayment

  1. What is the amortization period (time to repay the mortgage)?

Financial Costs

  1. What is the annual interest rate?
  2. What are the charges for obtaining the mortgage?
  3. What are the fees for missing a payment?
  4. What are the charges for changing the payment amount?
  5. What are the fees for late payments?
  6. What are the charges for changing the payment due date?
  7. What are the fees for adding a lump sum payment?
  8. What is the penalty for early repayment?

Renewal and Fees

  1. How much principal and interest will be paid by the end of the loan term?
  2. Are there fees associated with mortgage renewal?
  3. Does the interest rate change upon renewal, and if so, when?

Understanding Mortgage Terms

The loan term is the duration the bank provides the loan. At the end of this term (e.g., 1-5 years), you may:

  • Renew the loan for the remaining balance
  • Pay it off
  • Transfer it to another financial institution

Investment Property Mortgages

For rental properties, ensure the rental income exceeds your costs, including:

  • Borrowing costs
  • Property service fees
  • Potential vacancy periods

By asking these questions, you’ll gain a clearer understanding of your mortgage obligations and make more informed decisions when purchasing property in the UAE.

In our latest blog article, we cover several key topics related to banking in the UAE. For those looking to stay updated on the latest banking regulations and practices, here are some essential reads:

  1. UAE KYC Update: How to Update Your Emirates ID with Your Bank
  2. How to Check if a Cheque Might Bounce
  3. How to File an Insurance Complaint in the UAE
  4. Can You Leave the UAE with an Ongoing Loan?
  5. UAE’s New ‘Aani’ Platform: Instant Money Transfers Using Mobile Numbers