UAE mulls new mortgage system

UAE mulls new mortgage systemUAE home market is going through difficult period and to stimulate recovery in the home and real estate market, UAE is planning to initiate a new mortgage system, which will be similar to the system used in Denmark.

The Dubai International Financial Centre has introduced a new home loans system. It has introduced this system after a detail research and feasibility study of the plans.
The Centre has also analyzed the financial and business gateway between the regional and the global market.

Meanwhile, news agency WAM has reported that the new mortgage system includes private residential mortgages as well. This is going to be funded by issuing standardized bonds. Issuing bonds, the authorities are looking forward to create a large and liquid mortgage bond market.

The new system will come into operation in next 18 months as announced by Dr Nasser Saidi, chief economist and head of External Relations, DIFC Authority.

He also said that all the commercial banks, mortgage banks, construction companies and developers, regulators, investors and stock exchanges are welcoming the new feasibility study. By following this Danish model, home owners will not end up with negative equity in their homes. It will allow the homeowner to retire their mortgage.