Al Zad Real Estate

Off Plan MOrtgE

Purchasing an off plan loan house in Dubai through financing or a mortgage is a practice that is growing in popularity. It’s making it possible for purchasers who otherwise would not have been able to enter the market to do so—and to do so for houses in price ranges they never would have imagined.

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Despite its growing popularity, most purchasers are merely ignorant of the topic of using a mortgage to purchase an off plan loan house. This book aims to rectify that by covering all the essential information you require regarding financing the purchase of a plan in Dubai through a mortgage.

Can I get a mortgage for an off plan loan property?

Yes. Buyers can absolutely get a mortgage for most off-plan properties in Dubai. Like with any mortgage, there are qualifying conditions that need to be met however these are relatively straightforward and similar to what would be required for a ready property.

How much can I borrow for an Off Plan Property?

The majority of purchasers are aware that the maximum loan-to-value ratio, or “LVR,” for a ready home is 80%.

This essentially means that the bank will only finance up to 800,000, or 80%, of the buying price, say, for a home valued at 1,000,000.

The maximum loan-to-value ratio for an off-plan purchase is 50%. This percentage is applicable to citizens of the UAE as well as foreign nationals. As in the preceding case, the bank will only lend a maximum of 500,000 or 50% against a property that is being acquired for, say, 1,000,000. It’s crucial to remember that the LVR does not change whether you purchase an off-plan apartment, townhouse, or villa.

It is also important to note that the 50% finance can only be done so once the buyer has paid 50% or more of the property and not before. This means any potential buyer must have enough cash funds to cover at least 50% of the property being purchased.

Which banks will finance an off plan property purchase?

In contrast to ready properties, where purchasers may very much use any bank to get a mortgage, off plan loan financing options are a little more limited.

This is because some banks do not provide financing for off-plan purchases, and those that do are picky about which projects they will actually fund. Banks often only grant mortgage loans for homes that fall under the master developer category, which includes companies like DP and Emaar homes. However, on occasion, they also accept loans for private developers’ projects, so all is not lost in those situations.

Qualifying for an off plan property mortgage

In many aspects, being authorized for a mortgage on an off plan loan house is similar to getting approved for a ready property. The developer will be evaluated according to the standard criteria, provided that they are on the list of approved developers that the bank would lend to. Similar to a ready property mortgage, each bank may have different qualifying requirements, although they will generally be pretty standard.

Can I still sell if I have a mortgage on my off plan property?

Yes, to put it briefly. It will not prevent you from selling your off plan loan house if you have finance or a mortgage. Because a bank is involved, the procedure will be a little different, but it won’t be too difficult or complicated.

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