What is a mortgage and how does it work?
A mortgage is a loan that a lender extends to a home buyer to help finance the purchase of a property.
How are monthly mortgage payments structured?
Monthly mortgage payments are split into 3 parts: the principal, interest and insurance. The principle is the amount that goes towards the equity of the property, the interest is the rate charged to obtain the loan, and insurance is a mandatory addition to all mortgages.
How much can I borrow from a bank?
This will depend on your personal circumstances, such as your salary and existing liabilities. Have a chat with our mortgage advisor who will be able to advise you based on your circumstances.
What is the benefit of overpaying on a mortgage?
If you overpay on your mortgage repayments, you will pay off your mortgage faster and pay less interest over the term (use our early payoff calculator to get the sums). So overpaying can be beneficial.
Is there a circumstance when it is better to not pay off your mortgage faster?
If you have a low-interest rate and you put your money towards higher-interest investments, it might make sense to keep the mortgage ongoing while using capital to earn more money on higher-interest investments.
What are fixed-rate mortgages?
Fixed rate mortgages are where the interest rate charged on the loan stays the same for a certain period of time, usually 1,2,3 or 5 years. During this time your monthly mortgage repayment will not change.
What are variable-rate mortgages?
Variable rate mortgages are where the interest rate that you pay on your mortgage will change based upon changes to the EIBOR rate. This means that your monthly repayments can change over time.
What is a mortgage tenor?
This is the total length of the mortgage. The maximum length in the UAE is 25 years and is based on its affordability. This can be discussed with your mortgage advisor and confirmed by the bank.
I still don’t understand some things about getting a mortgage, what should I do?
We strongly recommend speaking to our mortgage advisor. They will tell you everything you need to know about getting a mortgage and guide you through every step of the way.
How long is the processing time for mortgage approval?
This is dependent on your personal circumstances. Typically, it takes around 2 weeks to get pre-approval and up to 2 weeks after signing MOU to get the final offer letter. Have a chat with our mortgage advisor who can give you realistic timeframes based on your circumstances.