How to Get a Mortgage Pre-Approval in Dubai: Costs, Timelines, and Benefits

What is mortgage pre-approval?

Essentially, mortgage pre-approval is one of the first steps you will take while successfully applying for a property mortgage in Dubai. While most people understand what a mortgage means, many often ask, “What does pre-approved mean for a mortgage?” 

Obtaining the pre-approval for a home mortgage essentially confirms that the bank has agreed that you meet their criteria for a mortgage, and will indicate the approximate loan amount that they would be willing to lend you.

Whilst this is an important step, you should bear in mind that a mortgage pre-approval should not be considered a legally binding commitment from the bank. Rather, it is an evaluation and approval of your financial position - which confirms your likely eligibility for a mortgage. 

Meeting the pre-approval criteria will help you not only obtain a mortgage but also your dream home in Dubai. 

Key benefits of mortgage pre-approval

Before understanding when to get pre-approved for a home loan or the cost of mortgage pre-approval, let us go through certain benefits that this step may offer for you as a home buyer. 

• With a mortgage pre-approval in place, you will know how much the bank is willing to lend you. This, in combination with your deposit amount will tell you how much budget you have for buying a property. This will help you considerably narrow down your search and search time. 

• After getting the mortgage pre-approval, you will have a large part of your finances in order and you will know what fees and repayment amounts you can expect in future based upon the mortgage amount. This will help you plan your finances. 

• Upon getting your mortgage pre-approval, you will be in an excellent position to communicate with your real estate agent about your budget, allowing them to help you shortlist properties that meet your criteria.

• As a seller will know that you have obtained your pre-approval and thereby, have your finances in order, you will be considered a serious potential buyer - increasing your negotiating power and your chances of obtaining your dream property. 

• Having your mortgage pre-approval beforehand will allow you to place an offer immediately on a property you like. Often, many buyers lose out on a property because they did not apply for pre-approval and someone else placed an offer whilst they were waiting to receive it. 

What documents are required for mortgage pre-approval?

Having understood what “pre-approved” means for a mortgage and its several benefits, we proceed to another important aspect - the documentation. 

Submitting the correct documentation to obtain mortgage pre-approval is very important, as any errors can delay the process of obtaining a mortgage and your home. 

The documentation requirements for pre-approval differ for salaried and self-employed individuals. 

Here are the documents you should submit for mortgage pre-approval as a salaried individual: 

• A valid visa and passport 

• A valid Emirates ID 

• Salary slips for employment proof 

• Bank statements and payslips for the past three to six months (depending on the bank’s criteria) 

• Disclosure of all liabilities, including personal loans, car loan payments, or credit card bills. 

The required documents for self-employed individuals are: 

• A valid visa and passport 

• A valid Emirates ID 

• A valid trade license copy 

• Audited finances of the past two years 

• Memorandum of Association (MoA) and incorporation documents 

• Disclosure of all liabilities, including personal loans, car loan payments, or credit card bills.

Bear in mind that you may be required to submit additional paperwork depending on the bank’s varying requirements. 

Mortgage pre-approval costs in Dubai

There is no fixed mortgage pre-approval cost - as the rates of each bank differ. 

Generally, there will be an application fee that covers the cost of evaluating your application before providing the pre-approval. While certain banks offer this service for free, other banks may charge a non-refundable fee for it. 

Along with the potential mortgage pre-approval application fees, you will have to pay additional fees as part of the process of obtaining a mortgage in Dubai, which could include valuation fees, property fees, and insurance registration fees.

When to get pre-approved for a home loan

Before going house-hunting, it is important to know when to get pre-approved for a home loan. The answer is simple. If you have decided that you want to buy a property, and a mortgage is the best financing option for you, it is advised to apply for a mortgage pre-approval before you start your property search.

Your pre-approval letter will be valid for 60 to 90 days, giving you enough time to search for and decide upon a property. 

If you combine house hunting with the pre-approval application process, it may not only get very overwhelming but may cause you to lose focus on two highly important steps in your journey as a home buyer. 

How to apply for mortgage pre-approval in Dubai?

Applying for a mortgage pre-approval in Dubai can be a relatively straightforward process. Here are some steps you can follow while applying for it:

1. Research the banks that offer property mortgages and consult with them to understand if their mortgage options align with your requirements. It is highly recommended that you work with a mortgage broker who will have access to all mortgage providers and will match you to the most suitable one for your circumstances.

2. Ensure that you meet the eligibility criteria before applying for pre-approval, which is: 

   1. You are a UAE national or resident (however, expats can also apply for mortgages in Dubai - they have a different process to follow). 

   2. You are aged between 21 and 65. 

   3. You have a monthly income of AED 15,000 (salaried) or AED 25,000 (self-employed). 

3. Collate all the aforementioned documentation and submit it to the bank authorities for evaluation. Again, consider working with a mortgage broker who can do this on your behalf.

4. Find the ideal mortgage type for you. Dubai banks offer varied property mortgage options. Evaluate your options and select the one that best fits your circumstances. 

5. After your case has been evaluated and approved, you will receive a mortgage pre-approval letter from the bank. 

How long does it take to get a mortgage pre-approval letter?

Many people often ask, “How long does it take to get a pre-approval letter for a mortgage?” Rest assured, it does not take that long. If your application is in order, your pre-approval will be given within three to five business days, allowing you to kick start your house hunt very quickly.

Conclusion

Obtaining mortgage pre-approval is a relatively straightforward and quick process, particularly when working with a mortgage broker.

The exciting part of your journey begins after obtaining your mortgage pre-approval - finding your perfect property. And Engel & Völkers is here to help you throughout your home buying journey.

With over 45 years of real estate expertise and our bespoke real estate services, you can expect:

• Expert guidance from our RERA-accredited specialists

• A comprehensive network of professionals and properties throughout Dubai

• End-to-end property buying solutions for you 

Contact us today at +97144223500 to kickstart your home buying journey in Dubai!