mortgage

Dubai offers unique investment opportunities that are hard to match in the global real estate market. High-quality housing with a developed infrastructure, a wide range of five-star hotel service, steadily rising prices and demand and a yield of 5–8% per annum attracts investors from all over the world. And if earlier potential buyers were stopped by strict rules for property ownership for foreigners, with the advent of freehold zones in 2002, the situation changed radically. Today, the emirate has over 60 Freehold Zones and the list continues to grow. In this post, we will look at the list of freehold zones in Dubai, where you can profitably purchase buy-to-live and buy-to-let villas and apartments as an investment. WHAT ARE FREEHOLD ZONES IN DUBAI?  Freehold zones are designated areas of Dubai where foreigners can purchase real estate with the right of full ownership. Residential and commercial real estate purchased in these areas can be disposed of at your discretion. It means that you can rent, resell, renovate, inherit it, etc. There are no restrictions on citizenship, so this format is very popular among foreign investors and expats who come to Dubai for investment opportunities. Among the main advantages of freehold property are: Such real estate remains in the ownership of the owner and their heirs without time limits – as long as they wish it. Owners of freehold properties can use, sell or rent the property as they want. Owners of real estate in special freehold zones are entitled to a 3-year resident visa with the possibility of extension if the value of the property in Dubai is at least AED 750,000 ($204,000) and 10-year – at least AED 2 million ($544,500) in any emirate. A wide range of properties that meet different preferences and budgets in the best areas of Dubai with developed infrastructure can be the best investment.  FREEHOLD ZONES FOR BUYING APARTMENTS IN DUBAI BUSINESS BAY A thriving business community on the banks of the Dubai Canal is home to many international companies, hotels, banks and luxurious view apartments of various sizes and configurations. Closely connected to the city center, the neighborhood is ideal for entrepreneurs as an investment opportunity working in the business centers located here. The ROI for studios here is as high as 6.7%. The cost of apartments starts from AED 815,000 ($222,000). DOWNTOWN DUBAI Downtown Dubai is the cultural and financial hub of the emirate with many attractions and popular spots – from the legendary Burj Khalifa skyscraper, the Dubai Opera and dancing fountains to the Dubai Mall, the largest shopping mall in the country with a variety of shops and boutiques of world brands. The community is characterized by vertical development – this is an area of high-rise towers, offices and business centers, which is perfect for those who prefer vibrant city life. A dense tourist flow provides year-round high demand for real estate and, as a result, a good ROI – about 6% per year for studios for long-term rent, which makes it a good investment. The status of the community makes it an excellent option for short-term rentals, which can bring up to 11-13% per annum.The average cost of apartments starts from AED 933,000 ($254,000) for a studio. DUBAI STUDIO CITY This is one of the best areas to buy freehold property with maximum return on investment. Although Dubai Studio City is better known as a free zone for media companies, it also includes residential buildings with quality infrastructure, green parks and swimming pools. The rental yield here reaches 10.9% per annum, which makes the area especially attractive to investors. The apartments are offered in mid-rise and high-rise buildings with a pleasant family atmosphere. Dubai Studio City is a pet-friendly community with good schools and medical clinics, supermarkets and restaurants. You can buy a studio in Dubai Studio City for only AED 340,000 ($92,500). THE GREENS The project features 40 low-rise residential apartment buildings in the prestigious community of Emirates Living. This project is a great destination for those who are looking for a calm and serene lifestyle. It is another extremely profitable location with an ROI of up to 10.2% per annum. The community has a lot of greenery, its own lake as well as swimming pools, barbecue areas, playgrounds for children, places for walking pets and walking paths. Studios at The Greens start at AED 520,000 ($141,500), which is also a good investment. FREEHOLD AREAS FOR BUYING APARTMENTS AND VILLAS IN DUBAI DUBAI MARINA Dubai Marina is the most famous community of Dubai on the coast of the Persian Gulf. This prestigious and popular area with dazzling skyscrapers, white sand beaches, numerous entertainment venues, bars, restaurants and marina has become one of the symbols of luxury property in Dubai. Here you can find comfortable studios, spacious apartments and penthouses, as well as villas. The average ROI for studios reaches 6.4% per annum while for 5-bedroom villas it can exceed 9.6%. Prices for apartments start from AED 670,000 ($182,500), for villas – from AED 3.1 million ($844,000). DAMAC HILLS Damac Hills is a prestigious mixed-use community in Dubailand with townhouses, villas and apartments, a professional 18-hole golf course, as well as sports and wellness centers, spas, shopping and entertainment facilities. Here you can find affordable studios from AED 330,000 ($90,000) and luxurious 5-bedroom mansions for AED 17.2 million ($5.2 million). The highest ROI in Damac Hills is 6.1% per annum – for studios, 1-bedroom apartments and 2-bedroom villas. MOHAMMED BIN RASHID CITY (MBR CITY) A large modern mixed development area with a large park, the world’s largest artificial lagoon and over 4 km2 of freehold residential real estate at affordable prices. Here you can find ultra-modern apartments, villas, townhouses and mansions with classic and futuristic design. The area is perfect for families with children. There are several prestigious schools with a good rating. In addition to popular entertainment venues, there is a center for equestrian sports and falconry. You can buy a studio at a price of AED 715,000 ($194,500),

In early 2022, the UAE put into effect Federal Law No. 14 of 2020, amending and repealing some of the previous laws governing bounced or returned cheques. Among the changes include the decriminalization of cheques issued without sufficient funds. In a nutshell, a bounced cheque due to insufficient funds is no longer a criminal offence, except for those issued in bad faith. Prior to this, such instances were penalized by jail terms and the issuance of fines. Tenancies & Post-Dated Cheques There are 8.89 million expats in the UAE. That’s roughly 89% of the population and a majority of them rent homes here. So, the common system of paying via post-dated cheques is a hot topic. When it comes to tenancies, the use of post-dated cheques (PDCs) as a payment mode is the most common one, allowing tenants and landlords to proceed with little effort or difficulty. Unless the annual rent is paid in cash or in one cheque, it is customary for landlords to take the entire year’s rent in multiple cheques. For tenants, this allows them to essentially pay the entire value of the rent in advance without technically releasing the amount until the date indicated on the cheque. For landlords, it serves as a safety net, ensuring and settling the payment for their properties for the year. Bounced Cheque Before the Amendment A bounced cheque used to be a criminal offence under UAE law. According to the now-defunct Article (401) of the UAE Penal Code, instances of dishonoured cheques — for any reason — were punishable with penalties in the form of detentions or fines. Here’s a familiar scenario in Dubai’s leasing landscape while it was still in effect: If a tenant’s cheque is dishonored, a landlord could resort to filing a criminal complaint at a local police station. Thereafter, the police may summon the drawer of the bounced cheque, the tenant in this case, where he or she is given the option to settle the amount. Otherwise, the matter could be taken to court. If the settlement does not happen, the police may register a case against the tenant and endorse the case to the public prosecutor or criminal court. This is where criminal liability is determined and a fine or detention is imposed. At least that’s how it used to be. Bounced Cheques After The Amendment The amendments to the rules in early 2022 now classify issuing a cheque without sufficient funds as a civil offence. Further, partial payment of a cheque is now mandatory under the changes. The changes introduced aim to foster amicable settlements between parties, landlords and tenants included. Ultimately, it redefines what constitutes a crime in commercial transactions involving returned cheques while decongesting the UAE’s judicial system in the process. This means the previous steps of filing a police report and the ensuing procedures are removed from the equation. Instead, a cheque bearer can directly present a returned cheque to request an executory order for the payment of the entire or remaining value in question. With this, banks are obliged to release any available funds in the drawer’s account for the cheque bearer’s benefit unless the beneficiary refuses the partial payment. It is important to note that cases involving fraud can still be criminally prosecuted. These include cases involving falsifications, forgeries, and fraudulent practices to prevent cheque encashments. How Capital Zone can helpWe are the best mortgage brokers in the UAE, offering comprehensive solutions for all your mortgage needs. With years of experience and expertise in the industry, we are equipped to help you navigate the complex process of securing a mortgage. Whether you’re looking to buy your first home, invest in real estate, or refinance your existing mortgage, our team of professionals is here to assist you every step of the way. Contact us today to learn more about how we can help you find the right mortgage solution that fits your individual needs and financial goals. 

When it comes to selecting a mortgage, the interest rate is an important factor to consider. However, it’s not just the interest rate number that matters; the method of interest calculation is equally significant. Financial institutions often use terms like “flat rate” and “reducing rate” to describe different interest calculation methods, along with other terms like “fixed rate,” “variable interest,” and “promotional rate.” In this article, we aim to explain these terms and help you understand their implications for your mortgage decision. Understanding Interest Calculation and Mortgage Products: To grasp these terms, it’s essential to differentiate between the interest calculation method and the underlying mortgage product. While they can be combined in various ways, it’s important to understand their individual meanings. Flat Rate vs. Reducing Rate – The Interest Calculation: Let’s start by understanding the interest calculation methods: Flat Interest Rate: A flat rate is a straightforward approach where the annual interest is determined at the beginning of the loan based on the initial loan amount or principal. For example, if you have a 1,000,000 AED mortgage with a flat rate of 4%, the annual interest will be 40,000 AED, regardless of the year. Flat rates are appealing to many borrowers due to their simplicity. However, lenders are attracted to the relatively higher rate of return they offer. Reducing Rate: A reducing rate of interest, also known as a diminishing rate, recalculates the interest at the start of each year based on the current mortgage balance. Initially, the interest may appear higher, but as you make payments and the outstanding balance decreases, the interest also decreases. For instance, a 6% reducing rate on a 1,000,000 AED mortgage may result in 60,000 AED in the first year, but after fifteen years and a halved principal, only 30,000 AED will be added. Generally, a reducing rate is more beneficial, especially for long-term mortgages, as the reduction in interest has a greater impact over time. Fixed vs. Variable – The Mortgage Product: Now let’s discuss the options for mortgage products: Fixed Rate: A fixed rate mortgage offers a predetermined interest rate for a specified period. It can be either a flat fixed rate or a reducing fixed rate, depending on the interest calculation method. Fixed rates provide stability and predictability, enabling borrowers to effectively plan their finances. Variable Rate: A variable rate mortgage involves an interest rate that fluctuates based on external factors, usually tied to inflation. Variable rates are typically calculated using the reducing rate method since calculating flat variable rates offers little benefit and can be confusing. While variable rates come with some uncertainty, they may present opportunities for savings if interest rates decrease. Choosing the Right Mortgage for You: So, which mortgage is suitable for you? Here are a few factors to consider: Loan Duration: For long-term loans like mortgages, a reducing rate is generally more advantageous as it has a more significant impact over time. Additional Payments: If you intend to make extra payments towards your mortgage, a reducing rate mortgage is beneficial as it can significantly reduce the interest calculated in later years. Interest Rate Comparison: A flat rate is only preferable if the percentage offered is substantially lower than comparable reducing rate mortgages. Conclusion: When selecting a mortgage, it’s crucial to comprehend not only the interest rate but also how the interest is calculated. Terms like flat rate and reducing rate can significantly influence the overall cost of your mortgage throughout its duration. Generally, a reducing rate mortgage is more favorable, especially for long-term loans, as it reduces the interest burden over time. How Capital Zone can help We are the best mortgage brokers in the UAE, offering comprehensive solutions for all your mortgage needs. With years of experience and expertise in the industry, we are equipped to help you navigate the complex process of securing a mortgage. Whether you’re looking to buy your first home, invest in real estate, or refinance your existing mortgage, our team of professionals is here to assist you every step of the way. Contact us today to learn more about how we can help you find the right mortgage solution that fits your individual needs and financial goals.