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7 steps to buy a property in the UAE

Whether it's your first house or an investment property, buying a home is a big decision.

So, the more comfortable you feel about the process and how it works, the more you can relax and enjoy the experience – after all, it should be an exciting and memorable time.

Here are 7 steps to buying a property in the UAE.

1. Check your affordability

The first step to buying a home is understanding how much you can afford.

If you have enough money to buy your house outright, you’ll be a cash buyer and this calculation will be fairly obvious.

But if you need to borrow, which is the case for most first-time buyers, you’ll need to work out how much you could get via a mortgage. How much you can borrow depends on a wide range of factors, but here are the 3 key ones:

Your income

You'll need to prove your income with a salary certificate from your employer or with evidence of your self-employed income.

How much you can borrow will depend on a number of factors, including your income, Debt-Burden-Ratio (DBR), and lifestyle expenses.

Your down payment

The more of your own money you can put towards your property purchase, the better.

It means you'll need to borrow less, and it also gives the bank more security if you're unable to keep up with your mortgage repayments.

If you're a UAE national, you'll typically need at least 20% of your property's value as a down payment; if you're an expat, you'll need at least 25%.

Your credit score

Your bank or lender will check your credit score when you apply for a mortgage. The higher your score, the more likely you are to be accepted, and you could be able to borrow more at a lower interest rate.

It's not the biggest factor when applying for a mortgage, but it's important to know what your credit score is, how it works, and how to improve it if you need to.

2. Start saving

The more you can afford as a down payment for your property purchase, the better.

When looking for a mortgage, you might come across the term 'loan to value' (LTV). This is the amount you're borrowing as a percentage of the value of your property.

With a lower LTV, your mortgage application is more likely to be accepted, you could get a bigger loan, and you might even be offered a lower interest rate.

As well as boosting your LTV, your savings will help pay for the additional costs that come with buying a home, such as legal fees or your property valuation.

3. Know your ideal property

Take some time to prioritise what's important to you in your home, instead of focusing on nice added benefits or price alone.

For example, do you need a parking space or a large outdoor area, and would you be willing to sacrifice a bedroom to get them?

It's also important to think about your long term needs. Moving home is usually expensive, so it's important to plan ahead for the future.

Don't overlook location for the sake of getting a bigger home, and consider:

  • what schools are nearby?
  • how long would your commute take?
  • what shops and restaurants are in the area?

If you're buying property in the UAE as an investment, you may want to prioritise the rental income it could generate and how easy it will be to attract new tenants.

Buying property in the UAE as an expat

If you’re an expat living in the UAE, there’s a limited number of areas you can buy in.

UAE nationals can generally buy property anywhere, but the government restricts expats from buying in certain locations. The rules also vary between the different Emirates, so you’ll need to check which ones apply to where you’re buying.

You should also check whether your property will be a freehold or leasehold ownership.

Freehold purchases are where you’d own the property, and the land it sits on. You can only buy freehold properties in certain areas, such as investment areas or designated freehold areas.

For leasehold purchases, you don’t own the land that your property is on. Instead, you lease it for up to 99 years and may be able to negotiate an extension. These properties can be cheaper than freeholds, but you must ensure you’re aware of all the legal restrictions you’ll face if you buy one.

For more information on the rules for expats, visit the UAE government portal.

4. Get an Approval in Principle

Once you have your budget sorted and a general idea of how much you need to borrow, you can get an Approval in Principle from your bank or lender.

An Approval in Principle is a strong indication that you'd be able to secure a mortgage up to a certain value based on the information you've provided - such as your salary, debt levels, and LTV.

You'll need:

  • a valid passport, visa or Emirates ID to be verified in branch
  • an income statement such as your salary certificate

Getting an Approval in Principle is a much quicker process than a full mortgage application. It's usually free, won't affect your credit score, and will prove to sellers and your estate agent that you're serious about buying.

Explore: Apply for an Approval in Principle

5. Make an offer

With your budget properly defined, you can start viewing properties and narrowing down your search.

At first, the thought of making an offer and negotiating with a seller can be daunting. But you might even enjoy it once you start to feel more confident about the process and the market.

So do lots of research on the area and local property prices before you make an offer.

6. Apply for your mortgage

When you've found a property and come to an agreement with your seller, it's time to start your mortgage application.

At this point, you'll need to choose what type of mortgage is right for you. For example, deciding variable-rate mortgage.

When you apply for a mortgage, you’ll be subject to a full credit bureau check, which will be recorded with the Al Etihad Credit Bureau (AECB), and your lender will need to conduct a valuation of your property.

7. The legal work

At this point, there will be certain legal procedures that need to be met to complete your purchase.

You'll usually need a real estate agent or a lawyer to help you through these steps, and the requirements vary depending on which Emirate you're buying in.

In Dubai, for example, you'll need to:

  • sign a Memorandum of Understanding (MOU) with the seller
  • apply and pay for a No Objection Certificate (NOC)
  • meet with your seller at the Dubai Land Department with your payment, original ID documents, NOC and MOU to receive your title deed

Once you have your title deed, you’re officially the owner of your property. Time to sit back and relax – or, start packing up your moving boxes!

Explore: Our range of home loans

If you do not keep up your repayments/payments, you may lose your property.

You may have to pay penalties if you pay off a loan/financing early.

If you do not meet the repayments/payments on your loan/financing, your account will go into arrears. This may affect your credit rating, which may limit your ability to access financing in the future.

Refinancing your loans/financing may take longer to pay off than your previous loan/financing and may result in paying more in interest/profit.

Explore more

Here's our handy checklist of all the things you may need to do before moving to the UAE.

Find out everything you need to know about moving to the UAE with our guide. 

Choosing whether to buy or rent your home is a difficult decision, but our guide can help you decide which could be the better option for you.