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BEST OFFERS
Employed Resident 3.98% | Self Employed Resident 4.35%
EIBOR RATES TODAY
On |
5.119350
One Week |
5.119080
One Month |
5.381240
Three Months |
5.150750
Six Months |
5.157700
One Year |
5.451520
Mortgage refinance, greatest opportunities for UAE property owners in a low interest market
14/10/2021
8 Min
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The cyclic UAE property sector is shifting gear & growth opportunities are aplenty

As we close the chapter on a once in a generational global calamity, Dubai has come to the world stage again to be recognized as one of the safest places to live by the world’s elite. Further fueled by a 6-month love affair that Dubai calls the EXPO 2020, the UAE real estate market is once again primed for a bull run. In this FCMB’s smart blog post we discuss how property owners can take advantage of refinancing using historically low-interest rates in an appreciating real estate market

Property values/sales rise, interest rates remain low

"Sales of Dubai's upscale properties, once slow, soared 230% in the first quarter of 2021 compared to the same period last year". (Associate Press, Dubai Luxury Home Market Soars as World’s Rich Flee Pandemic, 2021).1

During the first 2 quarters of 2021 property values increased, data shows that the average price of apartments have completely recovered to previous highs, while, villas have recovered about 80% of value. (propertymonitor.ae, 2021).2

In addition, the recent numbers of overall home purchases and financing have shown a significant uptick in the first 6 months of 2021. In a bullish property market, one would expect interest rates to increase, however, mortgage interest rates remain stable and low compared to historical highs. If history is any indication, interest rates though lags are soon to follow increasing property values and sales.

An ideal time to activate your property equity

Positive market sentiments, low and stable interest rates, and increasing property values present great opportunities for property owners to re-evaluate their options, in essence, it is an ideal time to activate the capital you have built up as equity on your property through refinancing.


Property refinancing is a tool for growing your wealth

As a property owner refinancing may be the solution for you. Whether you own a fully cash or mortgaged property, a buy-out or an equity release are two of the most popular ways to refinance. Refinancing can be one of the most profitable financial decisions you make, however, if the refinancing deal is not set up right you may run the risk of losing money. Let's take a look at how you can benefit from a profitable refinancing deal in the current market.

Take advantage of increasing property values

Property values have been on an upswing since the beginning of 2021, this means the increased equity value allows additional funds for refinancing. Also, property owners who were overexposed for years (loan value exceeds property value) would be crossing over to a net positive, thus making favorable refinancing options possible for the historically overexposed properties. Simply, you have access to more funds and the ability to negotiate better terms & conditions for your refinancing deals with a bank.

Upgrade, renovate and add value to properties

You may be dreaming of the perfect Italian kitchen, a relaxing pool, an oasis of a bathroom, or simply renovating your property. It is a great time to consider such upgrades on the account interest rates remain low while property prices increase. By using an equity release facility you can gain the pleasure of upgrading and increase the real value of your property.

Lower monthly repayments and shorter mortgage tenure

A well-planned buyout with a lower rate can help you save thousands of Dirhams monthly on your mortgage repayments and even shorten the duration of your mortgage. Simply, save more and pay off your mortgage faster.

Re-fix your high variable rates with lower rates

If your mortgage is in the variable interest rate phase you can look for a buyout with a different bank. By fixing rates you can save big on monthly repayments and also save a fortune in total interest paid to the bank.

Eliminate/cut-down fees, get better terms and conditions

The terms and conditions of a mortgage differ from lender to lender. Even though some fees remain mandatory a smart buyout may give you the financial freedom that allows you to avoid or reduce associated costs. E.g. Eliminate group insurance requirements, life insurance fees, forgo non-salary transfer requirements, eliminate bank-mandated property management conditions.

Put an end to the bad service by your current lender

We talk to many clients and help them change lenders on the sole issue of bad customer service provided by lenders. If you are in the same boat and fed up with the current level of service, you can change lenders while getting a better deal in the process.

Expand your property portfolio

If you are an individual looking to add another property to your portfolio or thinking of upgrading, you can take advantage of low rates and leverage your current properties to expand and increase the net worth of your holdings. With increasing demand in the property sector, interest hikes are to be expected. You may never get another chance to refinance at lower rates.


Common Pitfalls of Refinancing, how we help you avoid them

As great as refinancing your property may sound, timing and organizing a profitable buyout or an equity release may be tricky, in addition, it can be a time-consuming process. FCMB BUYOUT is a specialized service crafted for achieving profitable and convenient outcomes for individuals thinking about refinancing. Let’s take a look at how we help you safeguard yourself and set up the best refinancing deal.

Minimize refinancing costs and fees

Anytime a mortgage refinancing is done processing/pre-payment fees are incurred, we keep a keen eye on these costs to make sure you come out ahead when the deal is done.

Search for lowest rates

Our team always keeps an ear to the ground for the best rates in the market. We evaluate your requirements to match you with the best rates on offer. Click for Smart Rate Check

Avoid overexposure

If your loan value exceeds the value of assets, you may run the risk of overexposure. We help you avoid overexposure to help you maintain a profitable financial portfolio.

Assist in obtaining market valuations for properties

Without knowing the value of a property it is hard to plan a refinancing application. We assist in accessing bank empaneled valuators to estimate property values to optimize your refinancing deal.

Assist in finding qualified contractors and estimating constructions costs

We assist our clients eyeing renovations to get in touch with qualified contractors to estimate costs and complete construction requirements.

Always by your side from start to finish

Refinancing as any financial service comes with completing forms, providing supplementary documents, and following procedures. We help our clients through the entire process from start to finish helping to save time and avoid the undue hassle. We like to call it “Application to Title Transfer” Service.


In conclusion, this may be the ideal time to refinance & achieve your financial goals 

The U.A.E property market is primed for another growth cycle, as an investor or property owner if you play your cards right you can stand to profit in the years to come. Buyouts/equity release combinations have come to the forefront as investment instruments in a low-interest rate climate. However, refinancing in the property market is highly procedural and may present to be a daunting task, FCMB has put together a great services package for any parties interested in refinancing to avoid common pitfalls allowing to them to invest with confidence.

You can get in contact with the FCMB team for any questions or clarifications. Furthermore, if you are looking forward to refinancing, get in touch with us for an obligation-free review.

With FCMB you can refinance with confidence | contact us for more info.

About the Author

This blog post was authored by FCMB Team & Zamran Zaharan.

Citations

  1. Debre, I. (2021, May 6). Dubai Luxury Home Market Soars as World's rich flee pandemic. AP NEWS. Retrieved September 27, 2021, from https://apnews.com/article/dubai-europe-middle-east-travel-lifestyle-62331d53cd4b1790d2f6c56f8af2016b.
  2. propertymonitor.ae. (2021, September). Dubai Property Prices | Dubai House Prices | Property Monitor. https://www.propertymonitor.ae/dubai-house-price-timeline.html


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