Getting off-plan properties in Dubai isn’t easy for every buyer. It might be due to a lack of payments/savings to pay the down payment. It is not possible to reserve a property without paying this amount to your developer.
So, if you are interested in buying properties through this method, you should check other financing options for off-plan properties in Dubai. You may find a reliable option to go with for investing in a property that will provide profitable results after some time.
Don’t you know about such options? You should read this blog as we will show you some best ways to finance your off-plan property in Dubai. This guide will help you understand those methods of financing your property and move ahead without facing problems.
6 Ways for buying off-plan Properties in Dubai
While vising some developers or investors for financing options for off-plan properties in Dubai, you will find a few. It is because most developers share those methods only that can help them make money in return. So, you may be unaware of other beneficial options available out there in the market.
To let you understand other means to finance your off-plan properties in Dubai, we have discussed some methods here. Just read about them and pick the one that suits you the best.
1. Cash Purchase
Undoubtedly, the very first method to finance your off-plan property is through cash purchase. It means that you have to pay the amount at once to developers for buying a property at less rates. Actually, off-plan is a term that is used for selling/purchasing properties even when they are not constructed.
You can say that it is the early time of the launch of any housing or apartment society. So, investors are welcome to buy properties at lower rates and sell them after the completion of the project.
If you have enough money in your bank, you should go with this plan and reserve an apartment or house in this phase. But you should do proper research about the developer and project for saving your investment.
2. Mortgage Loan
It is not necessary that a person always have enough money to pay the entire payment for a property in one go. Are you one of those people who are looking for some other methods? The best in this regard is the mortgage loan by banks.
Every bank has this service for its customers where they have to sign an agreement explaining some terms. The main term of such an agreement is that the bank can get rights to the property if the person is unable to repay their loans.
In simple terms, you will get money from a bank or loan provider to buy a house or apartment in this phase. You have to repay the amount in monthly installments or half-yearly installments. It all depends on the agreement you will sign with the bank. But if you are unable to pay, the bank can get the right of the property and sell it to recover its money.
3. Hard Money Loan
It is a particular type of short-term loan in which you can get money from any service provider. The main thing to consider in this regard is that it is a short-term loan and you have to return the amount after that period.
You may get this type of loan for 6 months, 12 months, or even a shorter time. But you must have to clear all your dues within that time limit. If you are unable to do so, you have to pay fine or face consequences according to your agreement.
So, it is recommended to go with this type of loan if you have a mind to flip the property within a short time after purchase. You can also avail of this loan if you have a maximum amount for an off-plan property but facing a few financing issues. In this way, it might be easier for you to repay your loan within the given time.
4. Home Equity Loan
This loan is good for those who are facing issues due to previous loan repayments by the banks. In simple words, if you have still an amount to repay to your bank for a previous loan, you will not be released any other loan.
Doesn’t matter whether you are applying for a loan from the same bank or another one, your loan application will be rejected. The reason is when a bank will send your account for a credit check and found you have a mortgage somewhere else, your application will be rejected.
In this case, you can go with a home equity loan that will be released on your previous loan payments. It means that you will get a loan according to your existing loan payments. In turn, you can invest in an off-plan property to buy it and start repaying your loan to the bank again.
5. Private Loan Providers
Abide by banks, you can also find many lenders out there who offer loans to people at a specific interest rate. For buying an off-plan property, you can lend money from such service providers and keep them paying with a specific interest rate.
Normally, the interest rate starts from 5% and keeps raising with the time of repayments. In simple words, if you are getting a loan for 2 years, the interest will be different from getting a loan of the same amount for 5 years.
So, you should have to check the agreement before signing it to know what will be the ratio of interest rate with a specific time. It will help you choose a loan provider with a minimum interest rate instead of facing problems after that.
6. Installment Planning
If nothing is working for you in terms of financing options for off-plan properties from the above ones, you should go with installment payment planning. For this, you must have to consult with your developer/investor and settle a payment plan with them.
You can ask them to get a down payment for the reservation of your property and get the remaining payment in installments of 12-36 months. It depends on your settlement with the developer that how much time you will get for the remaining payments in installments.
The Bottom Line
By reading the above blog, you have got an idea about 6 major financing options for off-plan properties. We have briefly described them in simple words for your better understanding. You can go with any of these methods or find another one by visiting loan providers or banks on which you can rely for financing.