Business | Property
Mortgage law boosts investor confidence
The Dubai Government has issued a Mortgage Law that officials say will help better regulate the emirate's growing housing market.
- By Saifur Rahman, Business Editor
- Published: 23:32 August 19, 2008
- The law makes all mortgage deals that are not registered with the Dubai Land Department null and void.
- Image Credit: Gulf News archive
Dubai: The Dubai Government has issued a Mortgage Law that officials say will help better regulate the emirate's growing housing market, partly tainted by project delays and corruption probes.
His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued the decree, legalising the housing finance sector in a 35-article law based on international best practices.
The law, which comes into effect 60 days after its publication in the official gazette, stipulates that mortgage contracts be registered with the Dubai Land Department, specifying the size of the loan, the repayment period and the value of the property.
The law also requires that mortgages taken out on properties in Dubai be sold by registered financial institutions, and be insured.
Officials and analysts said the law will boost investor confidence in the market and expand the housing finance sector.
"This is part of the government's initiative to support and regulate the market," Arif Al Harmi, chief executive of mortgage lender Amlak Finance, told Gulf News.
Do you think mandatory life insurance with mortgage is a good idea? What if a property buyer has his own life insurance policy? How will this affect your plans to buy property? Tell us at letter2editor@gulfnews.com or fill in the form bellow to send your comments.
Your comments
Yes its a good idea. If the insurer dies during the mortgage period, the balance amount will be paid by the insurance company. The burden does not come on the family members. Insurance is beneficial for the insurer.
Suganya
Dubai,UAE
Posted: August 20, 2008, 11:06
RERA and the Government continue to add sound measures and follow best practices for the regulation of the Real Estate Sector which has been taken over by Speculators here in Dubai. The question now is who will regulate banks and mortgage companies? For the past 2 years UAE Banks and Mortgage companies have charged between 7-8% for a Mortgage, while EIBOR and US Interest rates have dropped more than 2% in this period, which has effectively doubled their profit margin....
The only competition has been off-shore mortgages with lower rates based on LIBOR; which after the above mentioned decree will no longer be allowed as they are not licensed on-shore in the UAE....
Doesnt this simply decrease competition and harm end-users who are looking to buy in Dubai?
J
Dubai,UAE
Posted: August 20, 2008, 10:32
Yes I think its a good idea for both parties since it shall minimize the risk for the financial institution or the developer from one side and it shall secure the heritage on the other side.
Counselor
Dubai,UAE
Posted: August 20, 2008, 10:27
Insurance is very useful tool when taking a mortgage. With this you safe gaurd your family.
Ammeeya
Dubai,UAE
Posted: August 20, 2008, 09:37
I have my own life insurance policy and i have had mandatory life insurance when i financed my propoerty throug local bank. this does not seem to be a problem because if i resell the property that insurance will be cancelled and will still have my existing one.
Tariq
Sharja,UAE
Posted: August 20, 2008, 09:26
Of course it is a good idea. There is no need to leave the family homeless should some accident beset you. Insurance will give the family breathing room to organise their affairs.
Logan
Abu Dhabi,UAE
Posted: August 20, 2008, 09:13
Mandatory Life Insurance is a good idea and is in practice in most of the countries.It helps .
Syed
Toronto,Canada
Posted: August 20, 2008, 03:04
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