MUST KNOW MORTGAGE TYPES IN DUBAI YOU SHOULD BE AWARE OF

Fixed-Rate Mortgage

This type of mortgage is as the name itself suggests. The rates of the mortgage are fixed throughout the lease period. This is beneficial for the mortgage-taker if the market fluctuation takes the rate higher, but they are also stuck with the rate if the rates dip down as well. But this is a generally popular form of mortgage taken.

Variable Rate Mortgage

This system of mortgages varies in its repayments. The borrowers can adjust up the rate when they are lucrative and also may adjust down the rate if they need any adjustments done. Under this type, there are two sub categories available in the market.

Discounted Rate Mortgage

With this plan, the lender offers a discounted rate of repayment installments. The Emirates Interbank Offered Rate (EIBOR) governs the rates for mortgages and this plan offers a discount on that rate. The fluctuations of the rate happens with the discount applied.

Capped Mortgage 

These mortgages are given out with a fixed payment rate capped off. Even though the rates might change with the market, the maximum value of an installment is sorted out at the beginning of the mortgage process.

Remortgage 

This method offers the borrowers to extend their mortgages by binding it with a new mortgage or transferring it to another lender to change payment durations or rates.

Offset Mortgage

Under the Offset Mortgage method, a borrower can link their savings, current and credit accounts together with the lease account. The payment rates reduce when the money in the accounts rise up.

Investment Mortgage

This type of leasing is given out for buildings with one to four units or a family home. Five or more unit-buildings are considered as commercial real estate and the leasing is based on the fact that the buildings are being rented out or sold as an investment.

Non-Resident Mortgage

Dubai offers mortgages for non-residents with shorter terms of higher instalments. These are given out to non-residents of countries who are accepted by the lender, who is employed or self-employed and has the minimum income that the bank defines after the tax deductions. If these criteria are met, the lenders can finance the investment up to 50% of its value.

MORTGAGE BY PROPERTY TYPE

Residential Mortgage

These types of mortgage plans are for end users. They have a long-term payment plan. The acquired property cannot be rented out or be used for commercial activities during the mortgage plan.

Commercial Mortgage

This is a plan for business owners who are looking forward to acquiring assets for a business. The property that is mortgaged cannot be used for personal activity. Usually the property itself is held as collateral in the deal. With considerable amounts set to be paid at the beginning, the owners should be able to access business funds without impacting it negatively to the business.

Land/Construction Mortgage

If a person wants to purchase land or build a property on an empty plot, this mortgage suits them. Excluding the designing phase of the project, the rest of the stages in building a property is done via this mortgage plan.

Above are the main mortgage plans that Dubai offers for its residents and non-residents. Choose the type of plan that would fit your lifestyle and finance plan. However the lenders have their own programs to qualify a borrower with different policies. To secure a property mortgage plan with proper rates, a lot of paperwork, financial reports and more formal work has to be done. But with a reputed real estate solution provider like Anarock Middle East, getting a mortgage is easier. We have the best mortgage options in Dubai partnered with us to offer our clients hassle free mortgage plans. Let us take care of the paperwork while you plan your house, business and life ahead.

Source : bayut