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Post-Handover Payment
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Are Post-Handover Payment Plans: Risky for Buyers?

Holo Blog

Post-handover payment plans are becoming increasingly popular in the UAE's real estate market. This innovative payment plan involves buyers paying a certain percentage of the property's total value during construction and the remainder after the property's handover. Many developers have implemented this payment plan to make property ownership more accessible to potential buyers. But the question is, are post-handover payment plans risky for buyers?

Before we answer that question, let's first understand how post-handover payment plans work -

As mentioned earlier, buyers pay a percentage of the property value during construction, usually around 30-40%, and the remaining amount is paid over a period of 3-5 years after the property handover. This payment plan is ideal for those who don't have the complete amount to buy the property but can afford to pay the remaining amount in instalments. This system also helps developers sell properties before their completion, ensuring their cash flow remains stable and uninterrupted.

One of the main advantages of post-handover payment plans is that buyers can move into their new property immediately after paying the initial deposit, even if the construction is not yet completed. This means that buyers can avoid paying rent while waiting for their new home to be built. Additionally, buyers can use the period after the handover to save money and pay off their mortgage in instalments.

However, there are some potential risks associated with post-handover payment plans -

The first risk is the possibility of a delay in the property's completion. If the construction is delayed beyond the agreed-upon date, the buyer may be required to pay additional rent or find alternative accommodation, which could result in additional expenses.

Another risk is that the buyer may not be able to secure a mortgage to pay off the remaining amount of the property. This could result in the buyer losing the property and the deposit paid to the developer. To avoid this, buyers must ensure they can obtain a mortgage to pay off the property's remaining amount before committing to the post-handover payment plan. Use a mortgage calculator to get an indication of how much you could be eligible to borrow and start your application for a mortgage loan.

Lastly, buyers must be aware of the terms and conditions of the post-handover payment plan. Some developers may require the buyer to pay a higher rate of interest on the remaining amount or charge additional fees for late payments. It is essential to read the contract carefully and fully understand the terms and conditions before signing.

In conclusion, post-handover payment plans can be an excellent option for buyers looking to purchase a property in the UAE. However, it is essential to weigh the advantages and disadvantages of this payment plan and understand the terms and conditions before making any commitments. As with any financial decision, it is always best to consult with a mortgage consultant or use a digital mortgage platform to ensure you are making an informed decision.

Where can I find a mortgage consultant near me?

Holo offers a digital mortgage platform that allows buyers to compare mortgage rates and products in the UAE, helping you make informed decisions about your mortgage needs.

If you have any questions or concerns about post-handover payment plans or any other mortgage products, do not hesitate to contact a mortgage consultant or use a digital mortgage platform to find the best deal. Need a quick answer? Use our mortgage FAQs.

This blog is for educational purposes, but everyone's case is unique, and local guidelines and regulations may change. Our mortgage advisors can help you with any question you may have and have the latest advice. Get in touch.

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