Mortgages are an essential part of real estate as they allow individuals to purchase properties they may not be able to afford with cash alone. Also, mortgage loans promote home ownership and serve as a useful financial tool for real estate investors. A customer after registering for a mortgage in Dubai has the option to terminate it as well.
Mortgage termination refers to the process of ending a mortgage agreement before its scheduled end date. Understanding the process of mortgage termination in Dubai is essential for property owners as it involves various legal and financial considerations. Let’s go through the process in detail.
Request for Mortgage Termination in Dubai
In Dubai, mortgage termination procedures are governed by the regulations and laws established by the Dubai Land Department (DLD). This government entity is responsible for overseeing the real estate sector in the Emirate. The service for mortgage termination in Dubai by DLD allows customers to terminate all types of mortgages on a property for Housing Establishments for citizens and banks.
Detailed below are the documents required, fees and the process of mortgage termination in Dubai.
Documents Required
When applying for a regular mortgage termination through a bank (electronically), only the owner’s Emirates ID card is required. Whereas, when requesting mortgage termination in Dubai through Real Estate Registration Trustees offices, the following documents are required.
- Owner’s Emirates ID card
- Letter from the bank for mortgage termination
It is important to note that for termination of mortgages other than the regular mortgage, the customer must submit the request by visiting any of the Real Estate Trustees’ offices. These other types of mortgages include those followed by a sale transaction, initial mortgages, usufruct mortgages, or conservative mortgages.
Procedure for Requesting Mortgage Termination
A customer can submit the request for mortgage termination in Dubai electronically with the bank or by visiting any real estate trustees’ offices. The service time usually takes 20 – 25 minutes. Read on to find out the complete process of mortgage termination.
Mortgage termination electronically via bank
- The customer submits the required documents to the bank.
- A bank employee inputs these documents via the DLD Document Vault into the e-mortgage system.
- The bank auditor audits the transaction.
- The transaction is transmitted to DLD for review, and the bank’s account is debited for DLD’s fees.
- The results of the termination request are sent to the customer via email.
Mortgage termination via service centre
- The customer visits any of the Real Estate Trustees’ offices and submits the documents to the employee.
- The employee enters the data into the e-system, which is then verified.
- The customer pays the required mortgage termination fees.
- Against the paid fees, the customer receives the payment receipt.
- The results of the termination request are sent to the customer via email.
Mortgage Termination Fees
A customer must pay the following fees for mortgage termination in Dubai.
- A mortgage termination fee of AED 1,000
- Title deed issuance fee of AED 250 (In case of normal mortgage with a title deed/usufruct title deed)
- Knowledge fee of AED 10
- Innovation fee of AED 10
Alongside, there is a Service Partner Fees that must be paid:
- AED 300 service fee + VAT
Payment Method
The following are the methods for payment of mortgage termination fees:
- ePay
- Noqodi
- Dubai Pay
- Manager Cheque to DLD
Documents Issued to the Customer
Once the mortgage termination is approved, the customer will receive the following documents:
- Letter of mortgage termination
- Title deed
- Balance fees
This was all about mortgage termination in Dubai. Mortgage termination can occur for a variety of reasons, such as paying off the mortgage in full, selling the property, or refinancing the mortgage with a new lender. Also, DLD allows customers to sell a mortgaged property, provided that the customer has a mortgage release letter from the bank. Read here to find out the process of requesting the sale registration of a mortgaged property in Dubai.
Moreover, always ensure to take into account the laws and ordinances governing mortgages in Dubai and Abu Dhabi or any other Emirate before applying for a termination request. Also, it is important to note that a tenant can end the tenancy agreement earlier than the term period. Read here to understand the laws and process for ending tenancy agreements early in Dubai.
That said, if you are still on a property hunt and haven’t settled on one yet, go through these properties for sale in Dubai and find your ideal pick.
Stay tuned to the dubizzle’s property blog for more information on laws and regulations pertaining to real estate.
