A mortgage loan is a type of secured loan that is secured by the borrowers' residential or commercial property and is given by banks or other financial organizations. Borrowers can put the money they save by maintaining the property as security until the loan is paid off for a variety of reasons, including expanding their business, paying medical bills, funding their children's education, and so on.
The United Arab Emirates has grown in popularity as a destination for expats throughout the years, particularly in Abu Dhabi and Dubai (as these Emirates are business-friendly). To keep up with this trend, the UAE mortgage market has developed into a well-established market, with local and foreign lenders offering home loans to expats.
Expats in the UAE can apply for a buy-to-let mortgage as well as a residential mortgage. The lending criteria, on the other hand, may range from one lender to the next and from one borrower to the next.
Here's a quick summary of mortgage loan features and perks to discover why they're so popular among UAE residents.
A mortgage can be obtained in the UAE at either a variable or fixed rate. Fixed terms are normally around 5 years long; however they can be as short as one year. When the fixed term expires, the agreement is converted to the bank's variable rate.
A fixed-rate mortgage gives borrowers certainty regarding the size of their monthly payments for a certain period of time. However, if the rate of interest appears to be declining, it would be a smart idea to investigate a variable agreement. The loan is normally for 25 years, and the payback must be completed before the borrower reaches the age of 70.
Fixed Rate Mortgage
Mortgage with a fixed rate. It's the most simple one, in which you agree on a set interest rate percentage before the loan period begins.
It's a fantastic alternative because it won't be influenced by future events, allowing you to determine the exact amount you'll pay in each installment for the entire period with no variation.
Variable Rate Mortgage
Mortgage with a variable rate. This type has a variable interest rate, as the name implies. It varies depending on the market or any new rules enacted.
It's a two-edged sword since the drop or increase is unforeseeable. Just make sure you're financially secure before going with this option to ensure you'll be able to afford any increases.
Residents in the UAE can get a mortgage, but they must meet certain eligibility requirements.
Depending on the bank, different documentation may be requested when applying for a mortgage. The following documents may be requested by the lenders.
The essential steps in obtaining a mortgage are outlined here.
In the United Arab Emirates, repayment mortgages are one of the most common types of home loans. They entail making a fixed monthly payment for the duration of the loan term. In most cases, payment will be made by setting up a direct debit facility from the borrowers' bank accounts on a monthly basis.
The interest-only mortgage is a rather uncommon type of loan. They entail paying only a portion of the interest each month and then paying the entire principal amount at the end of the period. Because the loans are risky, they are normally only available for a 5-year period.
In the UAE, foreign purchasers can buy apartments and homes in certain regions and the dream of buying a home can be fulfilled by getting home loans. Our experts at Dhanguard will assist you and help you to choose best home loan plan for you and your family, to know more about the process you can connect to us and get the best consultation.
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