Consider cutting monthly mortgage instalments

  • 04FEB
I am following on from some wise words and a blog from our mortgage partners Mortgage Finder but this is a very relevant topic at the moment and not only because we are all looking for cost-cutting options but the mortgage products currently available are very competitive.  It makes sense doesn't it - if you can't afford it or are struggling to meet payments - consider your options and refinancing seems to be the easiest path available to property owners at the moment.
This also applies to buyers with existing mortgages who want to look at refinancing to free up some cash and ease monthly outgoings to make further investments into other property, continue to grow a portfolio or to simply survive the current climate.  Incomes are being affected - not only loss of jobs and salary cuts but also tenancy vacancy rates and reduction in rents is also affecting the income of investors which could call for refinancing and cutting monthly mortgage instalments.  Banks are trying to offer some flexibility but can only do so much for so long to support clients and avoid them going into default.
Home finance rates are at an all-time low enabling mortgage clients to renegotiate their monthly instalments to a lower amount.  At the end of Q1 2020, the Central Bank realised some initiatives to provide some relief on the impact brought on by COVID19 including raising the LTV rate for first- time homeowners in Dubai. Banks were offering home loans up to 80% rather than the previously offered 75% and for UAE nationals the LTV also increased from 80 % to 85% which ultimately reduced the down payment required in financing a property purchase.  This improved loan rates also provides existing mortgaged property owners with an opportunity to renegotiating or refinance their mortgage enabling them to borrow a further 5%.  
Some buyers have chosen to sit back and see what is happening in the market, some have chosen to take advantage of the attractive post-handover payments plans available on off-plan properties and some are jumping in and taking advantage of best mortgage products and better time to buy.
Regardless, if you are not a cash buyer and are relying on finance to buy it will be your most costly monthly outlay and especially at the moment we need to make our money work for us and find some silver lining in the current situation.  Give our team a call if you want to discuss your options or would like an introduction to our qualified Mortgage Providers.
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4th February 2021