House hunting without knowing your budget could make you fall in love with something out of your league or overlook a perfect fit within your reach. That’s where pre-approval of mortgage comes in, offering clarity and peace of mind from the get-go.

Mortgage pre-approval doesn’t guarantee you a home loan, but it does provide a realistic picture of your borrowing power. So, if you’re ready to simplify your home-buying journey and make smarter financial decisions, understanding pre-approval of mortgages is your first move. 

What is Pre-Approval Of Mortgage?

A mortgage pre-approval is a primary evaluation by a lender that determines how much a person can borrow based on financial stability. 

During pre-approval of the mortgage, the lender will overview the buyer’s financial information, including credit history, income, assets, and debt, to provide a conditional commitment on a loan amount. 

Here are a few factors that influence pre-approval of a mortgage:

• Credit Score: A credit score of 650 or higher can lead to better loan terms and increase your chances of approval.
• Debt-to-Income (DTI) Ratio: Lenders prefer a lower DTI ratio, meaning your total debt payments should be a manageable portion of your income.
• Employment History and Income Stability: Lenders want consistent and reliable income sources.
• Down Payment Amount: Higher down payments can increase your pre-approval chances.
• Financial History: Past bankruptcies, missed payments, or other financial issues may negatively impact the lender’s decision.

How to Get Mortgage Pre-Approval in Dubai (Step-by-Step Guide)

The real estate industry in Dubai and other emirates is crowded with several mortgage lenders. With numerous options available, evaluating each lender carefully is essential, as well as paying close attention to processing fees and any early or late payment charges that may apply. 

For instance, My Mortgage offers low interest rates and instant mortgage pre-approval, allowing you to focus on finding your ideal home without unnecessary delays. Let’s break down the steps to make the pre-approval on the mortgage process through My Mortgage as smooth as possible.

Step 1: Submit a Mortgage Request

The process begins when you submit a mortgage request to My Mortgage. This request includes basic information, such as whether it is a new purchase, the type of house (villa or apartment), your budget, etc. This enables the My Mortgage team to analyze potential mortgage options suited to your needs.

Step 2: Providing Essential Identification Documents

Whether self-employed or salaried, all UAE residents must provide basic identification documents, including copies of passports, visas, and Emirates IDs. For this step, clients will need to provide additional financial documentation.

Self-employed clients should submit:

• 12 months bank statements.
• Latest credit card statement.
• Provide proof of financial facilities, like car or personal loans.
• Company documents like trade license and the audited financial accounts for the last 2 years.

Salaried clients should submit the following:

• A salary letter signed by a company representative and stamped with the company’s seal.
• The latest 6 months’ pay slips and personal bank statements are attached.
• Latest credit card statement.

Step 3: Meeting The Eligibility Criteria

When you submit a request to My Mortgage, their team reviews your profile to ensure it meets mortgage pre-approval in Dubai’s eligibility requirements. They first check your age (minimum 21, with repayment by age 65) and verify your income stability, which requires at least AED 10,000 monthly and a minimum of six months with your current employer. They also analyze your credit history and debt-to-income ratio to gauge your financial reliability.

Step 4: Curating Tailored Mortgage Options

Once the financial profile is documented, My Mortgage lists the best mortgage products in the UAE. They review exclusive offers, interest rates, and payment options, presenting clients with tailored choices. Clients receive detailed explanations for each option, enabling them to select the mortgage that best aligns with their financial goals.

Step 5: Finalizing the Mortgage and Property Transfer

Once approved, My Mortgage reviews the final terms and prepares clients for the property transfer. They guide clients through each detail, from signing the loan agreement to the final property handover, ensuring a smooth conclusion to the pre-approval for the mortgage journey.

Costs Involved After Getting Mortgage Pre-Approval

Before initiating your mortgage application, knowing the upfront costs, including the down payment, real estate agency commission, and land department fees, is crucial. You can also use a pre-approval mortgage calculator to calculate your costs.

Here are the costs that are generally incurred:

• Downpayment: 20% of the property’s value
• Land Department Fee: 4% of the property value plus AED 580 administration fee
• Registration Trustee Fee
  • AED 4,000 for the property above AED 500,000
  • AED 2,000 for a property below AED 500,000
• Fee For Mortgage Registration: 0.25% of loan amount  plus admin fee of AED 10 
• Commission: Typically 2% of the property value + 5% VAT
• Knowledge Fee: AED 290
• Bank Processing Fee: Between 0.25% to 1% of the loan amount + 5% VAT
• Valuation Fee: Between AED 2,500 to 4,000 + 5% VAT

Tips To Get Instant Pre-approval of Mortgage

To boost your chances of receiving a mortgage pre-approval in Dubai within 3-5 business days, ensure your documents are complete, accurate, and up-to-date. With everything in order, pre-approval can be issued quickly. Here are some tips to help speed up the process.

1. Save for a Larger Down Payment

Your mortgage application will be stronger with a larger down payment. Lenders consider approval risk, and the more you can put down, the less risky you seem and the better the chances of approval. For instance, if you’re an expat, try to pay more than 20% of the property value, as this shows greater financial commitment.

2. Lower Debt-to-Income Ratio (DTI) 

Banks closely evaluate your debt-to-income ratio, which measures your monthly debt payments relative to your income. A lower ratio indicates financial stability and reassures lenders of your ability to repay the mortgage. You can improve this ratio by paying off smaller debts, like personal loans or credit card balances, before applying for a mortgage.

3. Maintain a Stable Financial Profile

Before applying for pre-approval, avoid big purchases like cars and electronics. A consistent and stable employment history gives banks confidence in your income reliability. If you have changed your job recently, you should wait a little longer before applying for the mortgage, especially if your new job is on probation.  

Take Charge of Your Home-Buying Process With My Mortgage

Navigating mortgage pre-approval can be complex and detail-oriented, especially when gathering the right documentation and ensuring accuracy. A slight misstep in paperwork or timing can delay approval, which can be frustrating when you’re eager to start your home search. 

With My Mortgage, this process is simplified, as our experts guide you through each requirement, ensuring everything is in order and submitted on time. We offer personalized mortgage solutions to make the journey even smoother, providing fast, tailored support to help buyers take the next step with confidence.

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