Guide to accessing friendly mortgage
rates in Dubai
Getting access to a pocket friendly mortgage rate in Dubai can be a not
so easy task, however with the gumption and drive to achieve that, you can.
Asides the determination to find a pocket friendly mortgage rate in
Dubai, other considerations must be given due attention to prevent running into
a high overall cost in the end. The underlining factor behind this article is
to dish out important guidelines towards attaining the best, affordable,
mortgage rates Dubai can offer.
Best Mortgage rates in Dubai! How to find it!!
With the aim of grabbing the lowest and best mortgage rates there can be
in Dubai, it is advisable to start off with going in search of a “good enough “mortgage.
This is that step that includes applying to different financial houses and
making your pick, and gives you a firmer negotiating stance when a property is
found thereafter. As mortgage lenders such as credit unions, banks, private
lenders and finance professionals are after granting mortgage to reliable,
credit worthy individuals with a clean slate, it is advisable that you do an in-depth
review of your credit report, budget, comparing and contrasting mortgage interest
rates and rate quotes made available to interested individuals by lenders.
Research on the best Dubai mortgage rates online
After meet one on one with lenders and speaking with professionals, do
not rush into signing an agreement with either of them. The ned to engage in yet
another mortgage research cannot be overemphasised, however, this time online.
The best mortgage rate deals in Dubai can also be found online as quotes
can easily be gotten from diverse lenders without the restriction of proximity,
energy and time constraint. Again, after acquiring the different quotes from
the different lenders, compare all and see which is “pocket friendly” enough
and go ahead with contacting the lenders offering the best of deals.
As many lenders will have their best mortgage rates deals they are
offering listed on their websites, visiting the websites is not a bad way to
start. In other cases, you some lenders have a section for online interaction
with clients and for credit profile review, use this medium to get as much
information as you can get. The need to get properly informed before…….. a
mortgage cannot be over-stressed.
In Dubai, once you have found the property and negotiated the terms
and best mortgage rates with the lender with the agent you will be required to
put down a deposit of 10% of the purchase price. A Memorandum of Understanding
(MOU) is issued which states the terms and details of the purchase. This is binding
and must be adhered to.
Once an acceptable valuation has been received and all other
requirements have been met the final mortgage rate offer is issued. The bank
will ask for undated security cheques which are held by them until the loan is
repaid and these are used in the event of missing any repayments.
If there is an
existing mortgage on the property this must be cleared in full and the vendor
will need to provide a liability letter from their bank. These can take up to
10 days so are usually requested before the final offer letter is issues to
reduce delays. We will liaise with all parties to ensure that this can be paid
Purchasers must also
go to the developer’s office, along with the seller, the agent and often the
bank, to obtain a formal NOC (letter of no objection) to confirm that all
service & maintenance fees have been paid to date by the seller. This can
also add a few days to the process depending on the developer.
The size of your down payment can also affect the mortgage rate you pay.
The best mortgage rates are given to borrowers who make a substantial down
payment of 30 percent or more, or if they refinance with at least 30 percent
equity of more. That’s particularly true for borrowers with weaker credit,
where a large down payment can offset some of the negative effects of their
In terms of
mortgage duration, the maximum loan allowed in the UAE is 25 years for salaried
people up to the age of 65 (70 for self-employed). A longer term minimises
monthly payments but increases the total interest you’ll eventually pay to the
bank. We advise that you take the longest term as this will maximise your
borrowing capacity and if you can afford it, make additional payments during
the course of the loan. Borrowers can usually repay an extra 10 per cent of the
principal amount remaining each year without penalty, so you can repay quicker
if desired. Paying an extra 10 per cent per year on a Dh1.2 million loan will
enable you to pay off your loan three years sooner and save you over Dh75,000
When you take out your loan has a big effect on your mortgage rate.
Mortgage rates today may change by tomorrow or even within a few hours, based
on market conditions. The lowest mortgage rates you can get today may be higher
or lower than the rate you would get a week or a month from now – sometimes
To reduce the uncertainty, you can lock in today’s mortgage rates when
you apply for a loan. That way, if rates rise over the weeks before you close,
you still get the rate you locked in.
But what if rates fall? Many lenders have a provision that allows you to
re-lock your rate if it drops by a certain amount before you close, often a
quarter of a percent. So you’re protected in case the market moves lower. But
not all lenders do this, so be sure to ask in advance.
Over longer periods of time, mortgage loan rates can change quite a bit.
Today’s borrowers have become quite accustomed to paying rates of around 4
percent on a 30-year fixed-rate mortgage, which is unusually low by historic
standards. Rates of 6-7 percent were the norm just over a decade ago. Borrowers
in the early 1980s saw mortgage rates as high as 18 percent!