- July 4, 2022
- Posted by: Nikhil Sharma
- Category: Blog
A mortgage loan in Dubai is a sort of secured loan secured by the borrower’s commercial or residential property. It can be obtained through banks or financial institutions. The borrower can use the funds they earn by maintaining their property as collateral up to the time the loan gets repaid for various reasons, for example, expanding their business, paying for medical expenses, assisting with their children’s education or college, and so on.
It is a fact that the United Arab Emirates has grown in recognition as a popular spot for migrants over the years, especially in Abu Dhabi and Dubai. To keep up with the trend this year, there is UAE housing market has grown into a highly established market with foreign and local banks offering home loans for ex-pats.
Expats from the UAE are able to apply for a mortgage to buy in addition to a mortgage for residential use. The criteria for lending, however, could differ between one lender and the next, and between one borrower and the next.
Here Know the Features and Benefits of Mortgage Loans in Dubai
This is a brief overview of the features and benefits of property mortgages in Dubai to understand the reasons why they’re popular with UAE residents.
Two kinds of mortgage loans are offered throughout the United Arab Emirates: fixed and variable.
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People that finance their house by obtaining the help of a credit card are much more likely to take an extended commitment.
Deposit amounts for borrowers can vary based on their particular circumstances and the specific property they plan to invest in.
They can also refinance the loan if they wish to. The phrase “re-mortgaging” refers to switching lenders during the loan’s duration to allow the borrower to profit from reduced interest or more favorable loan options.
Comparatively to personal loans mortgages are characterized by a lower rate of interest as well as the longer repayment time
Types of Mortgage Loans in Dubai
A mortgage loan in Dubai is available with fixed or variable rates. Fixed terms are typically about 5 years long, but they could be shorter than one year. If the fixed term is over the contract is changed to a variable rate by the bank.
A fixed-rate mortgage provides buyers a certain amount of their monthly payment for a specific amount of time. If, however, the rate of interest seems to be decreasing then it is an excellent idea to look into an agreement with a variable rate. The term of the loan is typically 25 years and the payment must be paid back prior to the borrower reaching 70 years old.
• Fixed-Rate Mortgage
A fixed-rate mortgage loan. It’s the easiest type that you can agree on a fixed interest percentage prior to when the loan period starts. It’s an excellent option because it isn’t affected by the future, allowing you to choose the exact amount to be paid in each installment over the entire time period without change.
• Variable Rate Mortgage
A mortgage with variable rates. This sort comes with an interest rate that is variable, as the name implies. It fluctuates based on the market conditions or any new rules passed. This is a dual-edged sword because the decrease or increase isn’t predicted. Make sure that you’re financially secure before you choose this strategy to ensure that you’re able to pay for any price increases. Also, you can connect with the mortgage loan brokers in Dubai to make it effortless and obstacle-free.
Who can be eligible to get a mortgage loan in Dubai?
Residents of the UAE can obtain a mortgage loan in Dubai; however, the applicant must satisfy certain requirements for eligibility.
They have to work for their current employer for at least six months or for a full year, based on the requirements of the lender as well as the area they plan to purchase in.
The self-employed businesses of borrowers ought to have been in function for around 2 years.
Connections between lenders and borrowers can be advantageous since the bank is knowledgeable about your particular situation.
Certain lenders take applications only from those who work for a particular business. This means that those working for banks, multinational companies, or government entities may be able to apply for loans swiftly. If the company is younger or less established applicants might be unable to get loans from lenders even if they’re financially sound.
In order to get a property mortgage in Dubai, it is essential to have a solid credit rating as lenders are more likely to turn down applicants with poor credit. This is why people should avoid making an application for a mortgage until they’ve reviewed their credit reports and resolved any issues (if there are any)
People who don’t have credit, should apply for credit cards and pay them back in full every month to create a credit history.