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June 2015



What should be completed to secure the ideal mortgage before the rates improve?


The mortgage market in Dubai has been volatile recently due to the global economic uncertainties. Since the last week of October 2011, banks have been changing the loan interest rates in an almost weekly basis. As a result, the monthly housing loan rates rose from less than 1.00% to 1.30% on average in a week. What should a prospective home owner do in such times?


According to Dubai Central Bank data, 1500 people on average take out a mortgage every day. In other words, if the average closing time of 3 weeks is considered, there are thousands of people in the process of obtaining a loan or in search of it in any given day. Many of them have the following questions in their minds “Can I secure the low interest rates before missing them?” or “Can the bank increase my loan interest midway through the closing process? “


In such times, rates and terms of different banks difficult to follow as they are in a constant flux and the spread between the best rate and the worst is wide open. Additionally, some banks can provide significantly better conditions than the published “list” rates to some customers, so that pays to have an insider’s view.


For many people, buying a house with a Mortgage Loan Dubai is one of the biggest financial decisions in their life. Already a complicated process, taking out a mortgage during market turbulence can become very difficult and getting professional advice can be critical. Working with a mortgage broker can be helpful in the following ways:


– Your advisor will have access to the latest interest rates and conditions of many banks before everyone else. She will have insights as to which banks can raise or drop their rates or whether she can get a special offer for you.


– If market rates raise while you are in the closing process, your advisor can help you lock-in your conditions and accelerate the process.


– Some banks can change their conditions up until the date of title deed transaction while others are more flexible in this regard and can lock-in the offer on the date you submit the required documents into consideration. If you don’t want to take risks in this regard, your advisor can direct you to the correct address.


Here is another piece of advice: banks are obligated by law to provide customers a “pre-contractual information from” 1 day before the signing of the loan agreement. The interest rate and other terms on this information form will be your actual terms. Just in case, you should carefully examine this form before signing it. If there is something strange on it, talk to you advisor and the loan officer at the bank.

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