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7 September 2018

Read This Before Applying for A Home Mortgage in Dubai

Read This before Applying for A Home Mortgage in Dubai

 

Here are some of the factors to be considered before applying for a home mortgage in Dubai.


1. The Ever Increasing Mortgage Interest Rates

Mortgage borrowers in the United Arab Emirates are affected by the hike in home mortgage rates even with the slightest change. This is due to the fact that the long loan terms and high loan amounts amplify the effect of the increase in mortgage interest rates.

Mortgage owners in Dubai may observe that they are paying more on their home loans than before, with the current increase in EIBOR (Emirates Interbank Offered Rate). This is the interest rate that banks charged for interbank transactions in that country.


2. The Home Mortgage Rates

Banks in Dubai provide two types of home mortgage rates. These are the variable and fixed mortgage rates.

Variable Rate – This type of interest rate on mortgage changes with the market rate.

Fixed rate – this type of rate on mortgages is for a particular number of years that the loan will last.

The rate calculation on financing can be done by using the reducing balance method which charges interest rate based on the outstanding balance of the borrower.

 The second method of calculating home mortgage Dubai rate is by using a flat rate, based on the principal amount for the period of the mortgage term.

Nearly all the available home loans in the United Arab Emirates are given at reduced rates.


3. The Eligibility Criteria

Nearly all Dubai home mortgage Dubai loans don’t have a salary transfer requirement. As a result, transferring salary to the bank is not an obligatory criterion for applying for a holiday home mortgage with the bank. Nonetheless, being on the approved employers' list of the bank seems to be of great importance, because almost all home loans are only given to such individuals.

However, borrowers can contact any home mortgage consultant in Dubai to find out more about the eligibility criteria.


Steps Involved in Applying for Holiday Home mortgage

Despite the fact that getting holiday home mortgage may look daunting, taking care of the documentation will simplify the whole process. Interestingly, anyone finding it difficult to apply can seek the help of a home mortgage consultant in Dubai.


Step 1
 Choose the Holiday Property

There are many popular websites in Dubai that offer applicants with listing for properties. There are the Off Plan Properties and Ready Properties to choose from. The best choice is the Ready Property that gives the buyer the opportunity to move inside the property to let out or reside.


Step 2
Make a Sale Contract with the Property Seller

There should be an agreement made with the seller of the property, in case the buyer is buying directly from the developer. But it is strongly recommended that the buyer of the property should go through a real estate agent or accredited broker for any cheap home mortgage property transaction.

RERA has made things easier with the strict rules handed down for the real estate firms and brokers to follow. It is also very important for buyers to pay attention to their rights. Process your contract through a Lawyer and seek advice from a reputable Dubai home mortgage consultant.


Step 3
 Documentation for the Home Mortgage

This is the stage where documentation starts for whosoever is applying for holiday home mortgage. There are many documents needed to validate the application. The list of the required documents should be confirmed from a reliable source.


Step 4
Get a Pre-approval of Finance

Most banks and financial institutions in Dubai do give pre-approval of some sort to provide a rough estimate on the eligibility of the buyers against their income and current liabilities. This is very important for them to measure their eligibility. Banks usually charge a fee to arrange this.

Nevertheless, banks always follow the Debt to Burden Ratio (DBR) to decide the eligibility of applicants for a home mortgage in Dubai.


Step 5
Submit Property Details

 Finalize the holiday home mortgage details with the bank and allow them to do their final assessment, once the documentation process is completed. The banks will carry out their due diligence by providing an Offer Letter which will specify the terms and conditions of the cheap home mortgage.

 Please read home mortgage Dubai terms and conditions carefully and get clarification from a lawyer or the bank for any unclear aspects of the terms and conditions.

 

Step 6
Property Transfer

This is the stage where the developer of the property will issue a No Objection Certificate (NOC), once the cheap home mortgage loan is approved. Cost may be attached to this to transfer the property from the seller to the buyer at the Land Departments in the respective emirate.


Calculating Home Mortgage Rates

These are simply the rates of interest to be paid in addition to the capital to obtain the home mortgage loan. Home mortgage rates vary over a long period of time. A lower home mortgage rate means a reduced or lower monthly payments, resulting in lower costs of the property involved

 

The best way to get an accurate calculation for mortgage rates is to use the Home Mortgage Calculator Dubai. This is a tool used by people in the real estate market. It works by calculating figures in respect of mortgage. People in the real estate market need this great tool to speed up all calculations as it uses formulas which are not available in an ordinary or normal calculator.

 

Home Mortgage Calculator Dubai and How it Works

 

There are different types of home mortgage calculator Dubai that a borrower can choose from. The most essential of them offer a property buyer the payment due after entering the value of the property involved. Using this tool is without fuss and frills. A fixed monthly payment, simple interest, and a fixed time period are all needed by a borrower to calculate the exact value of a property or rates of a home mortgage in Dubai.

There is also the home mortgage amortization calculator which is just the home mortgage calculator Dubai that includes an amortization schedule. This schedule works by showing how much of the borrower’s payment finances the principal and the amount that finances the interest. However, there is no payment figure yielded that will have taxes and insurance incorporated.

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