Real estate buyers in the UAE are advised to secure pre-approval for a mortgage before they start searching for an apartment or house to invest in.

This will ensure interested individuals have a clear budget and avoid instances where they are forced to withdraw their booking due to financial constraints.

When booking properties, potential buyers are usually required to pay a deposit which is ten per cent of the agreed purchase price. However, some people who reserve residential units later find themselves in a situation where it's no longer possible to buy the property due to personal reasons. If this happens, the buyer may lose the booking fee, or even pay cancellation charges.

"Normally, the booking deposit is non-refundable and that amount is forfeited in the event of a booking cancellation," explains Elaine Jones, CEO of Asteco Property Management.

"The terms and conditions pertaining to such events and the consequences thereof are laid down in the apartment reservation form [ARF] and other documents signed and executed during the deal. It is therefore always advised that buyers seek pre-approval for the mortgage."

However, pre-approved loans are not a mandatory requirement in the UAE. "But any professional agent will advise the prospective buyer to first define his budget, and if it is a mortgage deal, the buyer will always be encouraged to get a pre-approved loan from the bank."

A pre-approved loan will also help an interested buyer make an informed decision on what type of property to look for. "It can be important and useful for the financial calculations, budgeting and to be aware of outgoings and how a mortgage works," says Jones.

"It is pointless searching for a property not knowing how much a property will cost. Furthermore, it will reduce the possibilities of a delay or default and can in some cases help the potential buyer negotiate a better sale price."