Real estate mortgage or installment plan in Dubai Marina?
The purchase of real estate in the UAE, as well as any other country, is a costly affair that requires huge investments. Unfortunately, not everyone can buy an apartment now and pay the full amount. So there are two ways out – to take out a mortgage or use the installment plan from the developer. Still, even having a significant budget high interest rates may terrify many potential home buyers.
But the crazy interest rates on mortgages terrify many potential home buyers. But when the question arises about the installment plan for real estate, for some reason it is perceived as a second name for a mortgage, but this is not true, and there are many differences. In this article, we will discuss the differences between mortgage and installment plan on the example of apartments in Dubai Marina for expats.
Mortgage in Dubai in 2023
The year of 2023 provides opportunities for buying real estate with a mortgage in free zones of Dubai. Still, there is some specificity. If a buyer has not obtained a resident visa, the enquiry is likely to be refused. It is essential to make a down payment – at least half of the value of the property. You will have a much better chance of approval, if you pre-form the resident visa. Foreigners can get a mortgage of 70-75% of the value of the property.
Mortgages are available for periods of 1 to 25 years. Specific conditions have minimum income applicants, credit history; much depends on the type of property and its location. The object must be commissioned or completed in less than 2 years. It can be located in Freehold zones (unconditional right to ownership by foreigners).
Profits of investing in real estate in Dubai Marina in 2023
No need to highlight the convenient location and abundance of advanced infrastructure of properties in the UAE.
The most vivid advantages of investing in Dubai Marina real estate are the following:
- Guaranteed yields of 7% per annum;
- Obtaining a golden residency visa for 10 years on the purchase of real estate from AED 2,000,000;
- The high standard of living;
- Attractive business and tourist center;
- The constantly rising cost of real estate;
- The loyal tax system.
Mortgage vs installment plan
Even though some buyers consider the mortgage and installment plan on the real estate purchase to be absolutely the same, these two options have several significant differences.
Simplicity of the procedure
Mortgage will have to get a bank, and for this you need to provide a lot of documents, the collection of which is spent a lot of time and nerves. So, it is necessary to prove your solvency and reliability by all the rules, so income certificates, credit history, etc. are collected. All these criteria suggest that only a person with a stable and high income can pass such a test.
Purchase agreement is concluded with the developer: the signed documents stipulate the down payment and split all other payments. Finally, the ownership of the apartment is transferred only after the last payment. For the period of installment payment you cannot sell the apartment, but you can register in it.
Terms of payments
A mortgage loan from a bank stretches for an average of 15-20 years, in rare cases up to 30-50 years, but as a rule, banks do not take that risk. In the case of installment payment the entire amount is paid within 1-3 years, up to 10 years. Installment payments can be made in the early stages of construction, in the unfinished house, and then the final payment will be lower.
But the events are not so distant still do not add to the confidence of investors, as there have been cases where the collection of the installments, the developer simply disappeared. To avoid such an unpleasant experience, it is important to work with a trusted developer. The real estate agency AX CAPITAL provides luxury housing units from reliable developers. The specialists collaborate with internationally known companies to offer profitable apartments and villas at reasonable prices.
The limit of choice
If you decide to take out a mortgage you can choose any apartment: either in a new building or on the secondary market, i.e. you have no limits on your choice. The installment plan is issued in a particular new building – only on the primary market. The documents for a certain apartment are drawn up with the developer, and the choice is not a lot, and it is narrowed down by the fact that there are not many such offers yet.
The outcomes
Regardless of the type of loan you are going to take to buy real estate in Dubai Marina, the investment will definitely pay off. Do not hesitate to purchase a stylish apartment in a modern neighborhood in Dubai and enjoy the new life.