Home »Unlabelled » Morgages in Dubai - General Information
In a mortgage the title of the property vests with the creditor till the loan and interest due is liquidated. In the event of a default and nonpayment of the loan the creditor can take over the property for his own use.
In Dubai mortgages have a slightly different connotation. As Dubai is a Muslim country the Shariat law cannot be completely bypassed. Amlak Finance and Tamweel are two of the biggest mortgage companies and have 60% share of the market. However both work within the confines of the shariat law.
As the majority of the population of Dubai is Muslim, loans are so tailored that they are shariat compliant. One of the principles of shariat loans is no interest to be charged. The result is that a bigger amount as down payment has to be paid as compared to a conventional mortgage. But it follows that that the repayment terms will always be better. Thus in a lot many cases non Muslims sometimes have exercised their option for Islamic mortgages.
However the construction recession has ushered in a negative effect on mortgages as Dubai is gripped by recession. Figures given out by the government and the Dubai land department show that the Dubai mortgage market slid down by 73 percent last year. The New Year may not bring substantial improvement on the real estate front.
The down slide in real estate values with some of the properties selling at a discount of 50% in value has affected a lot many people. There has been loss of jobs and income and for some payment of the mortgages is a problem. Some of the foreign expats who had taken out mortgages earlier when the going was good are feeling particularly vulnerable. This is because of the law in Dubai where non payment of debts can land you in jail. Mortgage is a debt and it is a worrisome scene.