Want to transfer your property in Dubai to your relative or sell it? Before proceeding with any of these decisions, you must know about the Mortgage transfer rules. Knowing these rules will help you to make an informed decision about the property. Dubai’s real estate market is growing continuously and attracting investors from all around the world. This might have led to a timely change in the investment policies as well. For this reason, property holders must go through the rules and regulations.
Thus, come and take a look at the blog here to find all the relevant details of mortgage transfer in Dubai.
Reason for Mortgage Transfer in Dubai
Before we proceed further with the rules and regulations, let’s understand the reasons why one has to go for a mortgage property transfer.
Investment Decisions
- The title lease has been released early
- Eligibility for the golden visa requires a property investment worth 2 million AED or more.
- With updated financing terms, plan to invest in the off-plan properties.
Financial Reasons
- Interest rates are lower
- Reduction in monthly installments
- Processing fees are lower in comparison
There could be many reasons for one to go for a mortgage transfer in Dubai.
Who manages the Mortgage transfer in Dubai?
It is the duty of the Dubai Land Department (DLD) to oversee all the property transactions in Dubai. Their function also includes the management of mortgage properties. The Dubai Land Department has to ensure:
- Documentation Compliance
- Securing property rights
- Completing the Debt obligation between the concerned financial institutions.
Eligible Customers
- Sole Proprietors
- Limited Liability Companies
- Individual Residents and Non-Residents
Who is eligible for Mortgage Transfers?
- The person to whom you are lending should approve your mortgage ability.
- You should have the existing mortgage documentation with DLD.
- The said property should be either freehold or leasehold as per DLD.
- The bank has to issue an NOC (No Objection Certificate).
- Good credit history with no overdue payments.
Legal Considerations
To protect the rights of buyers and sellers in real estate transactions, Dubai’s legal system includes a number of protections.
- Accounts for escrow
The DLD mandates that payments for off-plan real estate transactions be placed in escrow accounts to preserve transparency and prevent fraud. Both parties can feel secure knowing that these accounts are maintained by regulated financial institutions and that funds are only released after specific conditions are fulfilled.
- The buyer’s due diligence
Before purchasing a property, buyers are advised to conduct thorough due diligence. This entails determining the legal status of the property, looking for any outstanding debts or fees, and verifying that the seller is legally permitted to transfer ownership.
- Disclosures made by the seller
However, sellers are required to provide accurate and comprehensive information about their property. To prevent future disputes and legal issues, the customer must be informed of any known defects or legal issues.
Unpopular facts about Dubai Mortgage Transfer
- As long as the property is registered with an Oqood certificate, a mortgage can be transferred even if it hasn’t been turned over yet.
- If the bank permits it, foreigners who do not reside in the United Arab Emirates can transfer their mortgages.
- If the value of your mortgaged property exceeds AED 2 million, you might qualify for a UAE Golden Visa.
- You can convert to conventional financing if a property was previously mortgaged under Islamic financing (and vice versa).
- Particularly during off-peak times, some banks run promotions with zero-fee mortgage transfers.
Don’t of the Property Transfer
- Failing to inquire with your present lender about prepayment penalties.
- Transferring without evaluating three or more new offers.
- Disregarding unstated legal or processing costs.
- Not submitting in-person applications through a certified real estate trustee.
- Attempting a transfer while there is a disagreement over property or a discrepancy in valuation.
List of Required Documents for the Transfer
Depending upon the type of applicant, the list of required documentation might vary. Have a look at the list of different types of applicants:
Individual Borrowers
- For non-residents, a valid passport
- For residents, the original Emirates ID
- Certificate of NOC from the existing mortgage provider
- In case someone else is representing the owner, then the Power of Attorney document
- Letter from the new financial institution certifying the confirmation of new property registration
- ENOC sent by the developer
Sole Proprietors
- Proof of an authentic and official trade license
- Passport Copy or Emirates ID, depending on the person
- If applicable, the power of attorney documents
For Limited Liability Companies
- Incumbency Certificate
- Authentic trade license and written deed of partnership shares
- If applicable, then official legal resolution documents by the board of directors
Dubai Land Department (DLD) will tell you about the essential list of documents required for it.
Final Thoughts!
To conclude the blog presented above, we discussed all the major key points that you must keep in mind before going through the mortgage process. Remember to compare the rates from the other brokers as well, and do negotiate a bit. Prepare all the documents you might need for the mortgage beforehand for a seamless procedure.