What to look out for when choosing a mortgage

By DG Staff

DUBAI 24 November 2019: We all know that a mortgage is a loan taken from the bank to pay for a property, but for most of us, this is where our knowledge of mortgages begins to diminish.

When the plans of buying your first home edge nearer, you may find yourself having a play around on bank’s online mortgage calculators and finding out what your initial mortgage repayments will be. Then you jump onto a property portal and see what properties are within your reach – all very exciting!

As the dream of your ableness to step foot on the property ladder is starting to become a reality, the research into a mortgage truly begins. You will come across terms such as fixed rate, variable rate, bank margins and EIBOR (Emirates Inter Bank Offer Rate) and you will begin to try and understand what these mean to you.

You can have meetings with different banks and listen intently as they talk you through their competitive rates and the benefits you receive whilst taking a mortgage through them, or you can have an open and honest chat with an independent mortgage consultant.

These initial meetings can be rather overwhelming, and it becomes very easy to sign up to a mortgage because you have been convinced it’s the best deal without understanding what the repayments, insurances, processing fees and early settlement fees really mean and how they can affect you.

This is a common mistake that many first-time buyers make when getting a mortgage in Dubai. An independent mortgage consultant is the best way forward when you are trying to get your head around borrowing the largest amount of money you’ve borrowed in your life!

An independent mortgage consultant who is seasoned in the market will already have preferential rates set up with a number of banks. They can tailor a quote entirely revolved around your circumstances and explain exactly what you will be paying, what the fees are and where you can save thousands of AED.

To understand the mortgage process, it is easier to see it as a chain. The bank will borrow money from the Central Bank who work using EIBOR, banks then add their own profit margin which is combined with the EIBOR rate as a variable rate to charge to clients after their attractive fixed rate is complete.

We all know that a mortgage is a loan taken from the bank to pay for a property, but for most of us, this is where our knowledge of mortgages begins to diminish.When the plans of buying your first home edge nearer, you may find yourself having a play around on bank’s online mortgage calculators and finding out what your initial mortgage payments will be. Then you jump onto a property portal and see what properties are within your reach – all very exciting!

As the dream of your ableness to step foot on the property ladder is starting to become  a reality, the research into a mortgage truly begins. You will come across terms such as fixed rate, variable rate, bank margins and EIBOR (Emirates Inter Bank Offer Rate) and you will begin to try and understand what these mean to you. You can have meetings with different banks and listen intently as they talk you through their competitive rates and the benefits you receive whilst taking a mortgage through them, or you can have an open and honest chat with an independent mortgage consultant.

These initial meetings can be rather overwhelming, and it becomes very easy to sign up to a mortgage because you have been convinced it’s the best deal without understanding what the repayments, insurances, processing fees and early settlement fees really mean and how they can affect you.

This is a common mistake that many first-time buyers make when getting a mortgage in Dubai. An independent mortgage consultant is the best way forward when you are trying to get your head around borrowing the largest amount of money you’ve borrowed in your life!

An independent mortgage consultant who is seasoned in the market will already have preferential rates set up with a number of banks. They can tailor a quote entirely revolved around your circumstances and explain exactly what you will be paying, what the fees are and where you can save thousands of AED.

To understand the mortgage process, it is easier to see it as a chain. The bank will borrow money from the Central Bank who work using EIBOR, banks then add their own profit margin which is combined with the EIBOR rate as a variable rate to charge to clients after their attractive fixed rate is complete

Dubai Gazette