Many people want to own a property in Dubai, but they do not have the total amount or sufficient liquidity in full and cash. Therefore, a number of buyers resort to real estate financing and submit their applications to the lending institutions and banks that study them. Based on the buyer’s ability to pay monthly installments and fulfill his obligations to the bank, such responses are made to such Requests to be accepted or rejected. But it is clear that the UAE banks in general, and the banks of the Emirate of Dubai in particular, have greatly reduced the waiting period for an answer and the number of conditions that regulate this process, in order to keep pace with the changes in the local real estate market and the speed required to conduct sales and purchases and all real estate transactions.
Suppose, for example, that a person wants to buy a house worth 1,000,000 dirhams and would like to obtain bank financing that pays its installments over 25 years. What is the real amount that he must have to start the purchase process, and what are the expenses that await him to complete the sale transaction.
1. Advance Payment
For a property with a value of 1 million dirhams, the amount of the down payment amounts to about 20% or 25% of the property price, which in this case is equal to 250 thousand dirhams, and this percentage may vary up or down depending on the situation of the buyer and the amount of his financial income and the type of property he is buying. He would like to buy it, in addition to the bank itself.
2. Transfer Fee
In addition to the down payment, in general, the buyer should expect to pay additional expenses ranging between 7.25% and 10% in order to cover all other fees such as real estate agent fees, bank expenses, Dubai Land and Real Estate Department fees in case the property is located in Dubai or developer fees anywhere Another in the Emirates. Where the percentage of the ownership transfer fee ranges between 6,000 and 10,000 dirhams
3. Dubai Land Department fees
The Dubai Land Department transfer fee is 4% of the property price, which in the case of buying a property for 1 million dirhams is equivalent to 40,000 dirhams.
It should be noted that some developers in the Emirate of Dubai are giving their clients the possibility to pay half of the registration and ownership transfer fees with the Land Department, where the developer in this case pays 50% or more of the value of these fees to the Land and Property Department, and this is one of the advantages of buying from a real estate developer in Dubai. The only obstacle in this case is the limited number of ready-made properties that the investor can buy from the developer. If you want to know the options available for sale from the developer, you can contact us
By clicking here.
Interested in discounting government fees?
4. Mortgage Registration Fee
The buyer will also have to register the mortgage with the Dubai Land Department, and the fees for this registration are 0.25% of the value of the mortgage or loan, which in this case amounts to 750,000 dirhams, which makes it up to 1,875 dirhams in addition to the previously mentioned expenses Which includes ownership transfer fees and registration fees with the Land Department in the Emirate of Dubai.
5. Mortgage processing fees
Mortgage processing fees are up to 1% of the mortgage amount. In the example of a property whose price is 1,000,000, this will represent approximately 7,500 dirhams.
6. Evaluation Fee
The property appraisal fee ranges between 2,500 and 3,500 dirhams
All of these digital data clearly show that the issue of requesting real estate financing to buy a property whose price reaches 1,000,000 dirhams requires a prior study and certainly financial liquidity that in this case reaches the limits of 312,875 dirhams, including the down payment or prepayment of the property price, and a set of additional fees that are distributed between Ownership transfer fees, mandatory registration fees with the Dubai Land Department, mortgage registration and processing fees, as well as evaluation fees. Therefore, every applicant for a bank financing request to purchase two properties must be fully aware and prior knowledge of the additional expenses that he must incur to complete the purchase transaction and acquire full ownership of the property.
For more information, you can speak with an ADIB home finance expert, by clicking below:
I am interested in real estate finance from ADIB
Type of additional expenses The value of expenses for a property at a price of 1,000,000 dirhams
Prepayment 25% 250,000 dirhams
Transfer fee between 6,000 and 10,000 dirhams
Registration fees with the Dubai Land Department (4%) 40,000 dirhams
Registering a mortgage with the Dubai Land Department (0.25% of the value of the mortgage or loan) 1,875 dirhams
Mortgage processing fee (1%) 7,500 dirhams
Evaluation fees 2,500 and 3,500 dirhams
Total between 307,875 and 312,875 dirhams