THE A-Z OF MORTGAGES IN DUBAI - Part 2
The journey through the intricate world of mortgages continues. As we delve deeper into the realm of home financing, it's crucial to arm ourselves with the right knowledge. In Part 1, we began our exploration of essential mortgage terms. Now, in Part 2, we'll further demystify the language of mortgages, ensuring you're well-prepared for your home financing journey in Dubai.
Every bank appoints a third-party evaluator to get an independent evaluation of your property. An important point to note: the bank funds a mortgage or calculates its finance to value based on the evaluation or the purchase price, whichever is lower. What's more? The valuation report is a handy document to keep in your records for future analysis of your property.
On purchasing a property, apart from paying the purchase price, you also pay 4% of the land department fees and 2% of the brokerage fees. If these fees are a part of the buyer’s cost, some banks offer to fund 80% of these fees in your mortgage term as well. This product is only offered for new property purchases.
Tenure is the number of years assigned by the bank for repayment of your mortgage. For mortgages in Dubai, if you’re a salaried individual, the maximum age on completion of your mortgage can be 65 years, and 70 years for self-employed individuals. For example, if you’re salaried and 50 years of age, the maximum tenure you can avail would be 15 years. And if you were self-employed, you could avail of 20 years.
Your EMI, which is your equated monthly installment, is your monthly commitment to pay to the bank. In your EMI, you have a portion that goes towards the bank’s interest and another portion that goes towards the repayment of your loan (principal).
Pre-approval is an early assessment by a lender to determine how much you can borrow based on your financial information. It gives you a clear idea of your budget when looking for mortgages.
Parting Thoughts- The more we uncover, the clearer the path becomes. With every term we understand, the complexities of mortgages become simpler, making the process less daunting. As we continue our journey, remember that knowledge is your compass. Stay tuned for more insights in "The A-Z of Mortgages in Dubai: Part 3."