Dubai is one of the most beauteous and eye-catching city. The lush landscaped gardens, innovative structural designs of the skyscrapers, tax free environment, mixed culture, spectacular shopping malls and high quality of life is what defines Dubai in real. These attractions draw a lot of tourists every year to Dubai. On the other hand also lure people to make it their home permanently.
Now is the best time to secure mortgage in Dubai!
Since the economic downturn of 2008, Dubai real estate market has become favourable for buyers because the once spectacular Dubai real estate is currently facing price declines across all the localities. Due to property prices touching the bottom, attractive mortgage offers are available in the market making it the best time to secure a mortgage in Dubai for those Dubai real estate investors, who always had a dream to have their own property in Dubai.
How PMI can facilitate buyers?
For those buyers who currently want to invest in Dubai real estate but cannot secure a better mortgage deal due to less cash in hand, private mortgage insurance provides an ultimate solution. In this type of mortgage, buyers secure a loan of more than 80% of the value of the home. If the buyer has less than 20% down payment, Dubai banks allow them to pay private mortgage insurance fee to qualify for a mortgage deal.
PMI enables homebuyers to qualify for mortgage even with a 3% to 5% down payment. This insurance requires buyers to pay a fixed premium every year, which varies from lender to lender and the amount of the cash you put down for securing the deal. This insurance though costs a little, yet it is always worth the investment for buyers, since it not only makes them able to apply for mortgage but also reimburse the lender in case buyers are not able to meet their mortgage instalments on time.
Since, the banks are hesitant to risk their money with mortgages because this was the real reason of Dubai real estate collapse. PMI also facilitates them to instil trust amongst homebuyers with less money in hand. This insurance ensures them that even if the buyers will not meet their obligations. They would still get steady instalments of down payment.
When buyers can cancel PMI?
1) According to the general rule, when buyers have paid 80% of the house equity, they can cancel the PMI in consultation with the lender. Normally, if you have always paid your instalments on time, the bank allows you to cancel the PMI. On the other hand, if your payment history is not good and you have a poor credit score, banks ask you to continue PMI until the loan ends.
2) If the value of home has increased over the months and it gives the buyer 20% or more equity on revaluation of the house, buyer can cancel the PMI if lender allows and can enjoy paying only mortgage instalments without extra burden of insurance premium.
PMI does not only facilitate buyers and lenders of properties in Dubai but it can also contribute to bring Dubai real estate sector back to life. Since, PMI increase homebuyers’ eligibility to qualify for home loans. Securing mortgages on PMI can increase the demand of Dubai properties. The increasing demand matching with the oversupply can set Dubai real estate sector back on track.
William king is the director of Dubai houses, and Discovery gardens apartments. Being an entrepreneur and a passionate blogger he likes to share his expertise and knowledge by writing for various related blogs.