Everything you need to know about Homeowner Finance (Mortgages)
a) Is homeowner (mortgaging) financing available on freehold properties?
Yes, Home financing is available on all Nakheel real estate projects from Nakheel’s home finance subsidiary, Tamweel, and on Emaar projects from Emaar’s home finance subsidiary, Amlak. Mashreq Bank also offers mortgages. RAKBank offers mortgages only once the project is completed. A range of other banks and finance institutions are starting to offer mortgages as well. Lending criteria varies at each institution. As of yet, no financing institution is offering mortgages on freehold developments of any private developers.
b) How do I get finance?
Each financial institution has a checklist of loan criteria. The property purchaser will have to fulfill the financial institution’s loan criteria and provide the necessary documentation which includes but is not limited to: Copy of passport(s) for property purchaser(s), Bank Statement(s) of property purchaser(s) for 1 year, Credit History – Credit Bureau report (EQUIFAX, D&B etc.), bankers reference, credit card report.
c) When does the financial institution start charging interest?
It depends on the bank. In most cases, interest is accrued during the construction period and the property purchaser will have to pay/clear this amount on handover of the unit. Then the property purchaser will have to repay principal and interest installments for the tenure of the loan.
d) What will be the APR or Interest Rate? What is the compounding method?
Depending on the bank between 5.5% to 6.5% p.a. payable on a declining principal balance. It may be monthly or quarterly.
e) What are the mortgage tenures?
Between 5 to 15 years depending on the financial institution.
f) Do banks or financial institutions send the statement every period to our overseas address?
Yes, which could be monthly or quarterly.
g) Who should we make the payment out to?
Payments should be made out to the name of the property seller for down-payment amounts or to the financial institution for loan repayments.
h) Is a mortgage registered at the Govt. of Dubai Lands Dept.?
Yes, when the property purchaser’s financing becomes a realty mortgage, it will be registered on each property at the Govt. of Dubai Lands Dept. Mortgage Section.