RERA Mortgage & Finance in Dubai Real Estate 2

Question 1

Before selling a mortgaged property in Dubai, what must the seller typically obtain from the mortgage lender?

Accepted Answer

No Objection Certificate (NOC)

Answer

The mortgage lender must issue a No Objection Certificate (NOC) confirming settlement or transfer arrangements before a mortgaged property can be transferred.

Question 2

Which Islamic finance structure involves the bank purchasing the property and reselling it to the buyer at a marked-up price paid in installments?

Accepted Answer

Murabaha

Answer

Murabaha is a cost-plus financing structure where the bank purchases the asset and resells it to the buyer at a declared profit margin payable in installments.

Question 3

A UAE national is purchasing their first property valued at AED 8 million. What is the maximum mortgage amount the bank can offer?

Accepted Answer

AED 5,600,000

Answer

For UAE nationals buying a first property valued above AED 5 million, the maximum LTV is 70%, so 70% of AED 8 million equals AED 5,600,000.

Question 4

If a mortgaged property buyer defaults in Dubai, what is the bank's legal remedy under UAE law?

Accepted Answer

Initiate court proceedings to foreclose

Answer

Under UAE law, banks must initiate foreclosure through court proceedings and cannot unilaterally seize mortgaged property without a court order.

Question 5

What is the Ijara structure used in Islamic mortgage finance in Dubai?

Accepted Answer

A lease-to-own arrangement

Answer

Ijara is an Islamic lease-to-own structure where the bank purchases the property, leases it to the client, and transfers ownership at the end of the agreed lease term.

RERA Broker Practice Test

RERA Broker Practice Test

RERA Mortgage & Finance in Dubai Real Estate 2