April 19th, 2017 by Own A Space
Purchasing a property is never complete without mortgage finding. But ensure with your mortgage adviser some questions before adding your signature to the home application form. Following is the list:-
- Have you reviewed the entire market? Is there any availability of better deals?
- Why an upfront fee of one per cent charged by the bank?
- Are there any other possible hidden costs?
- Is the salary transfer the bank is insisting upon, necessary?
- What will be the demerits of having a mortgage which requires a salary transfer?
- Can a life insurance provider of own choice be chosen?
- What if I want to break my loan in between? What will be the conditions?
- What if I want to leave the city?
- What happens after the fixed period is expired?
- Can additional payments be made? Do they consist of fees and what are the limits?
Comparison of the Market
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Lowest advertised interest rate mortgage ends up being the most expensive. In Australia and the UK, which are mature mortgage markets, advertising rules imposes that banks and mortgage providers have to quote the annual interest and the annual comparison rate both which takes into consideration all fees like establishment, break, starting and ongoing interest rates and charges over the tenure of the loan so that the customers can compare the real total cost.
Once the situation changes for employment, loan requires a salary transfer otherwise it becomes hugely expensive. If you leave the country, lenders will keep your end of service and switch you to a more expensive non-resident interest rate. So avoid mortgages which needs a salary transfer.
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Life insurance policies and fees differ hugely between lenders in UAE. Ensure your understanding of life insurance cost, irrespective of you whether you can choose your own life insurance policy or not.
UAE Central Bank regulation imposes 1% of break cost at the maximum of the loan amount covered at Dh10,000 but your bank can charge more during the period fixed. If you want to sell or if you want to refinance with another mortgage provider, ensure you understand the implications of the same.
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Most of the lenders allow you to make additional repayments and some will allow at least 20% of the outstanding loan amount, annually without charge.
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