Mortgage & Finance in Dubai Real Estate Flashcards

In Dubai, which entity is responsible for officially registering mortgage agreements on freehold properties?

Answer: Dubai Land Department (DLD)

The Dubai Land Department is the sole official authority responsible for registering mortgage charges against freehold properties in Dubai.

What is the maximum LTV for a UAE national purchasing a first residential property valued at AED 6 million?

Answer: 70%

For UAE nationals, the 80% LTV applies only to properties valued at AED 5 million or less; properties above AED 5 million have a maximum LTV of 70%.

What does a 'mortgage by way of legal charge' mean in the context of Dubai property finance?

Answer: A registered lien giving the lender a priority security interest without transferring ownership

A legal charge mortgage creates a registered security interest that gives the lender priority claim over the property without transferring title ownership to the bank.

Which document confirms that a mortgage has been fully repaid and the lender's charge has been removed from the property's title?

Answer: Mortgage discharge certificate

A mortgage discharge certificate (also called a release or satisfaction letter) confirms full repayment and is used to remove the mortgage notation from the DLD title deed records.

Under UAE Central Bank mortgage regulations, what is the maximum Debt Burden Ratio (DBR) generally permitted for mortgage applicants?

Answer: 50%

The UAE Central Bank caps the Debt Burden Ratio at 50% of monthly income, meaning total monthly debt repayments cannot exceed half the borrower's gross salary.

A buyer refinances an existing Dubai mortgage to obtain a better interest rate. Under UAE Central Bank regulations, what is the cap on the early settlement fee charged by the existing lender?

Answer: 1% of the outstanding loan or AED 10,000, whichever is lower

UAE Central Bank regulations cap early mortgage settlement fees at 1% of the outstanding loan balance or AED 10,000, whichever amount is lower, protecting borrowers from excessive penalties.

When a broker's client uses bank financing to purchase a property in Dubai, in what order are the standard closing costs typically structured at the DLD?

Answer: DLD transfer fee 4% → Mortgage registration 0.25% + AED 290 → Agency fee 2%

Standard Dubai closing costs include the 4% DLD transfer fee, 0.25% mortgage registration fee plus AED 290 admin fee, and the 2% brokerage agency fee.