Can You transfer your home loan to another property in the UAE Mortgage Portability?

A lot of homeowners in the UAE believe that a mortgage is a lifelong commitment to the particular property. In fact, the so-called mortgage portability is possible, and in this situation, the borrower can transfer a mortgage to another asset, under specific conditions.

This knowledge of the operation of mortgage portability should lead to better decision making by homeowners when upgrading, moving, or reorganising the property portfolio.

What Does Mortgage Portability Mean?

Mortgage portability enables a borrower to transfer his/her current mortgage to another property without any complete closure of the loan facility. Rather than payment of mortgage and a clean start, the loan is sold off- bank permission.

This situation may be applicable when the homeowner wants to sell the existing property and buy another one keeping his current mortgage terms.

Mortgage Portability When It Can be of Use.

Mortgage portability is usually considered under:

• A residential customer is renovating to a new home of higher size.
• The customer is also moving out but would like to keep a good loan deal.
• Interest rates have risen since the time the mortgage was borrowed.

In this scenario, retaining a current mortgage can prove to be a better way than taking a new mortgage.

The way Banks evaluate the Mortgage Portability.

Even though the mortgage is already in existence the banks still review the financial profile of the borrower. This includes:

• Present earnings and stability in employment.
• Existing financial undertakings.
• Updated credit history
• Appraisal of the new property.

The new house should also satisfy the lending requirements of the bank.

Costs and Considerations

Portability of mortgages can include:

• Property valuation fees
• Administrative charges
• Registration and legal costs.

Penalties on early settlement can be evaded but it is necessary to consider the overall cost in this case.

Should Mortgage Portability Be an Option?

Mortgage portability cannot be applied to all cases. Refinancing or new mortgage can be a more suitable option in case the loan terms are not competitive anymore or the financial situation changed greatly.

Guidance by professionals assists in the establishment of whether portability is a viable choice in the long-term financial objectives.

Final Thoughts

Portability of mortgage gives flexibility to the homeowners who are in a transition of fluctuating property requirements. The knowledge of how, who, and how much the process costs enables the borrower to make better decisions and design their mortgage journey better.