News for Borrowers

Borrower

Banks can no more charge a 3 percent early settlement fee for borrowers who wish to exit their mortgage early, under a new directive from the UAE Central Bank. Rather, the fee has been reduced to just 1 percent on the outstanding mortgage amount or AED10,000 – whichever is less.

And borrowers who have already paid the 3 percent settlement fee have been instructed they can get a refund from their banks within 30 days. A circular sent out by the UAE Central Bank said: “Early settlement or partial settlement fee applicable to home loans has been reverted to maximum one percent of the outstanding balance or AED10,000, whichever is less. Banks and finance companies that arbitrarily altered the stated terms of the fees in current customer agreements are required to respect the original terms and conditions of the agreement and give back or refund all overcharges for all customers based on their original fee within 30 days of this notice. ”Chris Schutrups, managing director, Mortgage Finder, agreed with the decision and stated it was a great boost for borrowers, particularly in the present economic climate. He believed the news will persuade borrowers to switch their mortgage to lenders offering better interest rates and will end in an increase in buyout and re-mortgaging activity. The recent interest rate cuts that we have witnessed are pushing banks to be all the more competitive with their products. We have seen a decline in mortgage rates since the beginning of the year. All of this is happy news for those borrowers who were stuck with mortgage products that did not mirror the changing market.

In 2018, the UAE Central Bank had notified that lenders could charge up to 3 percent of the outstanding home loan amount on clients who exit their mortgage early. The banks had to prove financial loss in order to charge the full 3 percent.

 

 

 

 

 

 

 

Shreyas Tanna

About Shreyas Tanna

The winner of Mr. Pune 2009 Pageant, Mr. Shreyas Tanna is currently the young, dashing, and dynamic CEO of a market research company called Research N Reports in Pune. Fondly known as RNR, the company specializes in market research as well as industry analysis, and is closely associated with its parent company Absolute Markets Insights (AMI). Mr. Shreyas Tanna began his corporate journey as the Head of Corporate sales & PR at RED Entertainment while pursuing his degree for MMS (Marketing) from the MGM College of Management, Mumbai. After accomplishing the tedious task of balancing his work and education, he further polished his skills in Corporate Sales, Public Relations, Channel Development, Global Client Engagement, Strategic Consulting, and Brand Development by working with HDFC Life and ResearchMoz Global Pvt. Ltd. His dedication towards his work has even won him accolades such as the National Level Performer 2013 – HDFC Life and Mr. ResearchMoz 2015. A disciplined individual with a loving heart, he is often seen taking crisp walks with an engrossed look and a gentle smile within the premises of his company to interact with the various departments. And he will be usually followed by an adorable trail of his beloved trio of Shih Tzu babies proudly known as Gucci, Drake, and Paris. The most enticing thing that you will notice about this content and proud pet parent is his infectious positivity and the firm belief in his eyes, a reflection of his favorite quote, “LIFE IS BEAUTIFUL!”

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