Very simple, a loan that is used for the home-based purpose can be called as a mortgage loan or home loan in Dubai. Its working is but different irrespective of other loans. Like for an investment loan, you don’t need to provide a property as a security to your lender to get the loan amount but you have to follow this system in a mortgage system.
The actual working is something like, a borrower and a lender try to make a consensus through an agreement. The borrower put a loan plan in front of a lender and if two parties agreed the loan is provided through a written agreement. The two most important conditions are:
Who is the best lender? The borrower needs to mortgagee a property that would exactly the amount of loan being provided by a lender which could be a bank or any other financial firm. For such types of services, we would recommend you’re to approach a bank in UAE because they are more reliable than any other lending institution. You can negotiate in a better way and it would be an extra edge if you could get a loan from your nearest bank.
Credit history – The second most important point of agreement for both parties is the interest rate system and repayment method of the loan amount. If you have a good credit history, then any bank in UAE will be agreed to provide your loan amount at a very low-interest rate while on the other hand if you have a bad credit history then you will be judged on your past record.
Repayment of mortgage loan
There are two systems to repay the loan – flat rate system and reduce the rating system. The first one is most suitable for domestic and low budget customers. We can take an example like a loan of AED 24,000 taken for a period of 12 months, which means payments of AED 2,000 every month and this the actual amount. No one will only agree on the actual amount and you have to pay some interest rate as well. If someone wants to take the flat-rate system, add to this interest at 5%, which equals AED 1,050 per month with interest, for 12 months. This would be an extra amount like AED 600 per month. Now add this interest rate amount to your actual monthly payment. This would be the total installment for a month.
While on the other hand reducing the rate of interest on a loan with the same amount taken from a bank or any other lending institution is totally a different thing. Yes, you have to pay the loan amount but with a variant interest rate and there one isn’t bound with a time limit. If we have a look at the system, after each installment, the total amount of loan which can be called the principal amount reduces according to the payment option.
For the mortgage loans for expats in Dubai. we would suggest you approach a bank for the best services and affordable rates.
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