A mortgage buyer's guide to purchasing property

A mortgage buyer's guide to purchasing propertyImage Credit: Supplied

Dubai's freehold property market allows any person, irrespective of nationality or residence status, to own a property here. You may either decide to go cash-down or avail yourself of a mortgage. If the latter is the case, these straightforward steps will prepare you to complete your real estate transaction in the shortest possible time:

• Once the property is shortlisted, apply for a mortgage pre-approval from the bank.

• A memorandum of understanding (MoU) will then be signed with the seller and a deposit amount will have to be paid.

• Within a span of seven working days, your final approval from the bank should be in order. At this stage, the seller is required to provide a no objection certificate (NOC) from the developer to sell the property.

• The last leg will involve securing an appointment with the Dubai Land Department (DLD) for the registration of property in conjunction with the bank.

At various stages of this transaction, the mortgage buyer is liable to pay some fees. An understanding of these fees will make the budgeting process a whole lot easier from the buyer's point of view.

• Agent/broker fee – The real estate agent will charge 2% of the property value towards facilitating the deal.

• Property registration fee – DLD will charge a sum of 4% of the property value for registering the property.

• Oqood fee – On top of other fees, a pre-registration (oqood) fee of 4% is payable if the property in question is off-plan.

• Mortgage registration fee – DLD will also charge 0.25% of the mortgage value plus Dh10 knowledge fee towards mortgage registration.

• Valuation and mortgage processing fee – The bank will charge Dh3,000 (standard) towards valuation of the property and 1% of the mortgage value towards processing fees.

At all steps during the transaction, the buyer is required to carry his original passport. Documents, such as proof of income and list of liabilities, will be requested from time to time.

Handy Hints:

• It usually takes about 30 days to complete a property transaction in Dubai

• If you wish to avail of a mortgage, obtaining a pre-approval is very important

• The buyer is liable to pay fees to the agent, the DLD as well as the loan bank

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Source: Priyanka Wade, Special to Properties

The writer is a freelancer


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