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How Mortgage System Works For You in UAE?

 

Mortgage system in UAE is not very common because financial institutions here in UAE are worth consulting when one needs funds for property or any other purchase activity. The system is yet to be grown and thus very new in the region and many are unaware of the system and how it works. You can easily understand the terms of mortgage system, whether you are applicable to get one or not and from where you can avail the mortgage opportunity, these all questions will be answered with the below points.

Mortgage Payment Types:

There are basically two types of mortgage payments that usually works you are about to repay the debt on you from the lender, a lender could be a bank or any other financial institution. The first type of mortgage payment is interest only mortgage in which the borrower is only needs to repay the interest on the mortgage, for example if you have mortgage a property for 1.2M for 10 years, the payment will still be 1.2M after the duration of 10 years. The second type of mortgage is repayment mortgage, in which type you will need to pay both the mortgage amount and the interest on the mortgage over the course period.

Who Offers Mortgage?

Normally banks are the one who provides mortgage facility but due to some strict policies not everyone is liable to get mortgage from the bank and there some other financial institution play their role in providing UAE National and Expats this mortgage service, they have usually less restricted policies as compare to the banking institutions.

Qualification:

In order to get qualified for mortgage, you need to be met with certain policies applied by the financial institution, generally GCC nationals and expats are both eligible for the mortgage to apply. A few lenders also allow non-residents expats to apply for mortgage but there is one extra particular condition which he/she needs to meet in order to get to apply for mortgage such as the employment tenure needs to be at least six months and must draw a salary of 8000 dirhams. The average tenure of the mortgage repayment is from 15 to 25 years depends on the overall profile of the borrower.

Limitations:

There are different limitations being set for Nationals and Expats, as for expat, the loan amount will be set to 75 percent of the property value to a price value of AED 5M on the first property they will purchase, if the purchase value is more than AED 5M then the loan amount will be set 60 percent. For the second property for expats the loan amount will be set to 60 percent without any price value limitation. UAE Nationals can get up to 80 percent to a price value of AED 5M for the first property, percentage will be set to 75 percent if the price value will be higher than AED 5M. For the second property and so on, the loan amount will be set to 65 percent. The loan for the off plan projects will be set to 50% loan amount.

What to Do:

All you need to see is your qualification in order to be eligible for the mortgage, if you are willing to acquire property and you need mortgage but not sure where to start from then simple contact your real estate agent to guide you the whole process of mortgage and lead you to the better direction. Your real estate broker is your key to your new home because they are professional in these matters and doing business with financial institution and property developer for years and they precisely know that for which developer you actually can get the mortgage for and it is not available for every development project.