• Home Loans for Self-Employed Borrowers in UAE

    Owning a home is not just the fruition of a long term goal, it is also a reflection of one’s social bearing. Owning a home is a dream for many people and the actual purchase of a home is the culmination of one’s hard work and dedication. Purchasing a home is no ordinary feat and most people lack the finances to fund their own home. A home loan is one of the most sought after banking products by individuals and due to the larger finance amounts involved, banks are more than ready to fund such loans.

    However with higher loans come the risk of higher defaults and as such the criteria for providing a home loan is much stricter as compared to personal loans with smaller amounts. In most cases, the borrowers are required to earn a certain income and the loan amount availed should amount to an instalment which is usually not higher than half or sometimes even a third of the monthly income. This criteria is put in place to allow for easier payback whilst assuring chances of defaulting are nil.

    For self-employed borrowers however, the criteria are a lot stricter when it comes to availing a home loan in UAE. The reason is for uncertainty of income. Income levels may fluctuate based on the level of business activity and as such either the amount provided will be lower or the interest charged will be higher but all is not lost for self-employed borrowers when it comes to availing a home loan.

    Eligibility criteria of Home Loans for Self-Employed Borrowers:

    • The borrowers need to earn a minimum salary of a certain amount that is decided by the bank and influenced by the loan amount availed. Certain banks require this income criteria to be set at AED 10,000 ranging all the way up to AED 40,000
    • Borrowers are required to make a down payment which ranges from AED 20,000 to AED 35,000
    • Maximum loan amount available depends on the above criteria and ranges from AED 10,000,000 to AED 15,000,000
    • The interest rates charged maybe a flat rate or a reducing rate and are decided by the bank at the time of loan approval.

    Home Loans in UAE for Self-Employed Borrowers:

    The home loans offered in UAE cater to the self-employed borrowers as well and offer benefits of longer tenures and reducing interest rates. Loans can be availed that finance the property for up to 75% of its value. Some of the top home loans that cater to self-employed borrowers are given below.

    Top Home Loans for Self-Employed Borrowers:

    1.  Emirates NBD Home Loan for expats/for Emiratis: This home loan allows self-employed borrowers including those who are expats and have their own business to avail home loans with a flat interest rate of 2.2%. The loan can be used to finance up to 75% of the property value if the property is valued at DH 3 Million. Tenures can range up to 25 years but comes with a non-refundable processing fee which is 1% of the loan amount availed. For Emiratis who are self-employed Emirates NBD offers a finance of up to DH 15 Million but requires that the business of the borrower must have been active for a period of at least 3 years prior to applying for the loan and that the down payment for the loan be 20%. This loan also carries with it an arrangement fee of 1% and an early settlement fee of 1%.
    2. ADCB Mortgage: This loan also caters to self-employed borrowers and expats running their own business. The loan requires the borrower to earn a minimum income of DH 10,000 and offers loan amounts that range up to DH 10 Million provided a 30% down payment is made. The loan comes with certain charges that can drive up the cost of the loan such as an arrangement fee of 1% of the loan amount and early settlement fee which is 1%.
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