Can self-employed individuals get mortgages in the UAE?

The information presented below applies to all self-employed individuals in the UAE, including:

·       Small business owners

·       Freelance writers and designers

·       General traders

·       Contract-income workers

·       Self-employed dentists and doctors

·       Bloggers and influencers

If you are self-employed, want to buy a home, and are looking to qualify for a mortgage in the UAE, you will undoubtedly have to present more in the way of evidence to prove that you can pay the loan back.

Some lenders will be concerned that you do not consistently earn enough to make the monthly payments, or might even not want to deal with the additional documentation required to give a mortgage loan to a self-employed individual.

However, it isn’t impossible for self-employed individuals to qualify for mortgages in the UAE and there is ample evidence for it. What is important to remember when filing paperwork is that lenders will look at the stability of your income, financial strength of your business, and the ability of your business to generate sufficient income in the future.

What kind of income do mortgage lenders in the UAE look for in self-employed borrowers?

While all types of self-employment income are eligible for mortgage financing, lenders in the UAE will consider a stable and consistent source of income, in line with (and above) the minimum requirements outlined in their mortgage products.

What is the debt-to-income ratio (DTI) and how will it affect my application?

DTI scores measure your current and ongoing debt obligations against your average demonstrable income. They are used by mortgage lenders in the UAE to determine how much money you are able to divert toward monthly payments. Lenders typically prefer a DTI score below 45 per cent.

For a rough DTI estimate, subtract your current debt from your average monthly income and multiply by 100. All types of ongoing debt need to be considered, including (but not limited to):

·       Car loans

·       Student loans

·       Credit card loans

·       Personal loans

·       Loans in your home country (including any tax liabilities)

What sort of documentation will I need to provide?

You should be able to provide any income-related documents that reliably demonstrate regular income. You will also need to demonstrate the ability of you or your business to generate income consistently in the future. Documents that can provide such evidence include:

·       Bank statements

·       Tax return

·       Profit and loss statements

You will also need to provide documentation that demonstrates evidence of the ownership and existence of the business. These can include:

·       Business license

·       Proof of insurance for your business

·       Letter from a professional organization confirming current self-employment

·       Signed and notarized letter from your accountant confirming the existence and ownership of the business

·       Recent invoices proving that the business is open and operating

How else can I strengthen my UAE mortgage application as a self-employed individual?

Here are some additional tips that can increase your chances of getting a mortgage in the UAE as a self-employed individual:

·       Make a larger down payment

·       Pay off your car loan and credit card debt to reduce your DTI score

·       Demonstrate a track record of being able to generate stable income by showing proof of being self-employed for at least two years

·       If you are planning to buy a property in the future, look to improve your credit score. A higher credit score can make the borrower a better candidate for a loan

·       Provide proof of substantial funds available in case of an emergency (for instance, if your business closes) to allow, you to continue making monthly payments

·       Get a joint mortgage with a spouse or a friend. One of you will need to be permanently employed

·       Get a co-signer on your mortgage loan, such as a parent or relative

We hope you found this article helpful. Are you considering buying a property in Dubai or Abu Dhabi?  For support in getting your mortgage, start your journey and get pre-approved today with Lenddoo, the most trusted mortgage broker in the UAE!