Many buyers want to finance part of the purchase. On an off-plan property, a mortgage works differently than on a finished one. The reason is simple: the bank cannot value or secure something that does not exist yet with the same certainty.
The usual case: the mortgage arrives at handover
In practice, the usual route is to pay during construction with your own funds and take out the mortgage when the property is finished. Some banks look at financing units under construction in certain projects, but it depends on the bank, the project and the developer.
Financing limits
The UAE Central Bank sets limits on what percentage of the value can be financed. For off-plan property they tend to be lower than for finished property, and they vary depending on whether you are a resident or not, and on the value. These limits change, so check current ones with a mortgage adviser.
What the bank looks at
- Your income and your credit history.
- Your other debts and commitments.
- The value of the property at the time of valuation.
- Your residency status.
How to plan for it
Before you reserve, ask a mortgage adviser whether the purchase can be financed and on what terms. A pre-approval tells you how much you could borrow. Also count the mortgage costs: valuation, mortgage registration fee and bank charges. Leave a margin: if the bank approves less than planned, you need to know where the difference comes from.
A practical case. If you are counting on the mortgage arriving at handover, already have the rest set aside: the difference between the value and what the bank finances, plus the transaction costs. If the valuation comes in below the purchase price, you cover that gap.