A mortgage is a loan used to purchase a property or real estate. The property serves as collateral for the loan, and the borrower makes monthly payments to repay the loan over a set period of time, typically 15 or 30 years.

In a mortgage loan, the borrower typically makes a down payment and the lender provides the remaining amount needed to purchase the property. The interest rate on the loan, along with the term length and the borrower’s credit history, can affect the monthly payment amount.

There are different types of mortgage loans, including fixed-rate mortgages, adjustable-rate mortgages (ARMs), and government-backed loans (e.g. FHA, VA). It’s important to consider factors such as your budget, credit score, and long-term financial goals when choosing a mortgage loan that fits your needs.

The best mortgage offer in the UAE depends on an individual’s financial situation and specific needs. Some factors to consider when comparing mortgage offers include interest rates, loan terms, fees, and loan repayment options.

Some popular mortgage providers in the UAE include:

Rak bank
Fab bank
Emirates NBD
Emirates Islamic
Abu Dhabi Commercial Bank (ADCB)
Dubai Islamic Bank (DIB)
Mashreq Bank
HSBC
It’s important to compare the terms and conditions of different mortgage offers, and to work with a financial advisor to determine the best option for your specific situation.

The most significant aspect of a mortgage is to keep a realistic budget in mind. An applicant needs to understand the following before purchasing a property:

• The value of the chosen property must suit the budget
• You have to submit a down payment for the chosen property. In UAE, it would be typically a 20% of the purchase value. One must be ready to pay this amount.
• Before entering into a contract, understanding the fee structure thoroughly is very important.
• Learn the points regarding principal, interest, insurance and taxes that are essential parts to get a mortgage loan.
• Get ready to get routine repayments done as per the EMI calculated depending on the loan amount.
• The EMI rate will continue till the loan gets fully repaid or it gets reset at fixed intervals.
• Variable interest rates may change at any time. If it gets reduced, an applicant gets benefited because he would pay much lesser than the fixed interest rate. However, if it gets increased, the applicant would be asked to pay a lot more interest on the same loan. Hence, one must ensure that he can afford the Dubai mortgage interest rate before taking the mortgage loan.
• A non-refundable processing charge of 0.5 to 1% of the loan amount gets charged by the bank for processing a loan application whether or not one decides to take the loan.
• One would have to pay more by way of interest if he chooses buy-to-let mortgage instead of the ownership mortgage as his intends to profit from the very investment.
• If the applicant wants to prepay the Dubai mortgage loan from his personal savings, the bank will not charge a fee. However, in case he shifts the loan to a different loan provider, he will be asked to pay 1 to 2% of the loan amount as early settlement fees.
• By availing a mortgage loan, one enters into a legal contract with the loan provider. Non-payment of the debt gives the loan provider the right to opt for foreclosure which means he can sell the property to recover the loan amount. It negatively influences the applicant’s credibility highly. It can turn out to be difficult for the applicant to purchase a new property in future.