Here are the steps you need to do if you’re funding your handover payment through a post-handover payment plan in order to be ready and receive the keys in your hand as soon as feasible.
An off-plan house purchase takes time and perseverance. You want to be prepared for your handover payment and have everything set up to complete your purchase after waiting for your property to be completed. Here are the steps you need to do if you’re funding your handover payment through a post-handover payment plan in order to be ready and receive the keys in your hand as soon as feasible.
However, let’s define a handover payment first.
The last payment you must make to reserve an off-the-plan property is known as a handover payment. 50 to 70 percent of the cost of the property is typical in the UAE. You’ll probably need a mortgage to cover this expense as well.
However, there is a lot to get ready for before the money handover date. To assist you through the procedure with the least amount of stress, we’ve put together 4 tips.
4 suggestions for getting ready for the handover payment
Recognize your timeline
If you haven’t started planning in advance for handover payments, you can find yourself in a time crunch when they suddenly appear on your calendar. Give yourself plenty of time to discover the best mortgage for you and for the bank to handle all of your paperwork if you intend to use a mortgage to finance your handover payment. Give yourself at least a two to three month timeframe to complete the mortgage application procedure. You’ll have enough time to address any problems you encounter and still submit your payment by the due date, avoiding the developer’s late payment penalties. To know the deadline you are working toward, confirm that the contract’s agreed-upon handover date is listed there.
Be ready for fluctuations in market value.
Off-plan purchases carry risks, just like any investment. When building is finished, the valuation of your property that was agreed upon at the beginning of the process might not correspond to the actual market worth.
Your up-front payment can be larger than you anticipated if the completed market value of the property you acquired is lower than the original valuation and you are financing the handover payment with a mortgage.
On the other side, you might have to put down less money than you anticipated if the property’s ultimate market value is greater than the first appraisal!
Additionally, keep in mind that the UAE has a cap on LTV (loan-to-value ratio) at 80% for residents and 85% for nationals, so if the amount you need to borrow rises above 80%-85% LTV, you will need to pay the difference out of pocket.
Consult an authority
It’s wise to get professional advice before making any significant financial decisions. We advise employing the services of a mortgage broker to finance the handover payment. A mortgage broker can help you discover the best mortgage for your unique needs because they are knowledgeable about the subtleties of funding an off-plan handover payment. It is preferable to consult them early on, as they will also have a deeper idea of how long it takes to complete each stage of the procedure.
Obtain preapproval
A mortgage broker will also walk you through the pre-approval procedure. You and your developers will know how much money the banks are ready to lend you if you get a pre-approval. Pre-approvals typically last for about 60 days, giving you some wiggle room. As the handover payment nears, it’s a fantastic approach to help you feel at ease.
