A number of residents are looking to own a property rather than continue renting in Dubai.
Although property agents do assure these buyers of getting them all the required bank finance, they often urge them to sign a memorandum of understanding first.
On the other hand, home finance advisors warn against signing these MoUs unless one has a pre-approved home loan from the bank.
Not that complex, home loans are easy to get if you have all your documents ready. Emirates 24|7 has compiled a guideline for those looking to take bank finance for completed units.
# Step one: Take a pre-approval from the bank
The following documents are required:
* Passport copy and visa page
* Salary certificate addressed to the bank
* Latest six months’ bank statements from the personal account
* Details of all liabilities
* Copy of title deed with floor plan
After you submit the documents, the bank issues a pre-approval letter in three to five working days.
# Step two: Sign MoU with the seller
The buyer and the seller along with their respective agents have to sign a MoU, which states the time for completing the property transfer. The buyer issues a 10 per cent down payment cheque in the name of seller, which is held by the seller’s agent. It is cashed only if the buyer backs out of the deal.
# Step three: Apply for the final bank approval
After the MoU is signed, the buyer needs to send the following documents to the bank to obtain a final approval letter.
* Passport copy of the seller
* Signed MoU along with the receipt of deposit cheque given to the seller
* Issue a cheque for property valuation fee
The final mortgage approval letter is issued after the bank receives the valuation report that takes five to seven working days.
Thereafter, the buyer has to hand over three or four undated monthly installment cheques as security besides one cheque totaling the value of the property. The bank then opens a savings account for the mortgagor to debit the EMIs every month.
# Step four: Get the NoC
The buyer is sometimes asked to provide a no-objection certificate (NoC) to the developer for mortgage registration from the bank.
The buyer also needs to fill up a ‘know your customer’ form.
Following the submission of the above two documents, both the seller and buyer have go to the developer’s office to apply for the NoC. After the seller pays all his pending service charge dues, the developer issues a NoC, which is valid for almost 15 to 30 working days, depending on the developer.
# Step five: Registration Trustee
With the NoC issued, the bank takes an appointment with registration trustee.
The buyer is asked to take out a manager’s cheque for the down payment amount (25 per cent of the property value for the purchase of first property).
The buyer also has to bring a manager’s cheque of 4 per cent of property value plus DLD registration charges.
The registration trustees charge is Dh2,000 for transactions below Dh500,000, while it is Dh4,000 for deals above Dh500,000.
The mortgage registration fee is 0.25 per cent of the mortgage amount, which is to be paid through a manager’s cheque.
Both, the buyer and the seller have to be present on the scheduled day and time.
After the buyer pays the registration fee, mortgage registration charge, trustee charges, the trustee verifies and enters all data on the DLD website. Then the buyer and seller sign the official documents of transfer.
The title deed is issued with the bank taking the original and handing over the attested copy to the buyer.
Lastly, the buyer pays the agent’s commission, now-a-days through manager’s cheque.