abu dhabi finance-glossary

7/21/2019 Abu Dhabi Finance-Glossary

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Abu Dhabi Finance pjscP.O. Box 107616, Abu Dhabi, United Arab EmiratesTel: 800 ADF(233), +971 2 401 8555 ; Fax: +971 2 678 5510;www.adf.ae;[email protected]

Account Review

At present, mortgage instalments for Abu Dhabi Finance mortgages are reviewed andrecalculated every year.

Add a Borrower*Clients can choose to add an additional borrower to a sole name mortgage at any time.This is subject to a maximum number of two borrowers and the new borrower must beadded to the Sale and Purchase Agreement (SPA) and other necessary documents. Seealso Remove a Borrower.

Affordability (see also Debt Burden Ratio)This is a key consideration when clients apply for a mortgage and relates to their ability to

repay the loan based on several factors:

Monthly income after the deduction of regular monthly financial commitments.

The proposed monthly mortgage instalment

Monthly living expenses.

AgeApplicants must be a minimum of 21 years old to apply for a mortgage with Abu DhabiFinance and a maximum of 65 years old at the maturity of the loan salaried applicants and70 for UAE Nationals and Self-Employed applicants.

Allowable IncomeTo enable Abu Dhabi Finance to assess the Debt Service Ratio (see DSR) for yourmortgage application, we will need to determine your Allowable Income.There are a number of types of Allowable Income which may be appropriate to yourindividual circumstances, such as:

1. Basic Salary

2. Housing Allowance

3. Pension

4. Bonuses and Commission

5. Investments or Savings6. Rental Income if the property being purchased is for investment purposes.

Applicant(s)Essence: UAE Nationals and UAE residentsCompass: UAE Non-residents

Application Fee*In order to reserve a mortgage product, a non-refundable application fee may be payable.Under certain promotions this may be waived
http://www.adf.ae/http://www.adf.ae/http://www.adf.ae/mailto:[email protected]:[email protected]:[email protected]:[email protected]://www.adf.ae/


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Approval-in-Principle (AIP)

If you would like to know how much Abu Dhabi Finance could lend to you up to a definedamount before you have decided on a particular property, we can provide you with anAgreement-in-Principle (AIP) which is subject to a time-limit and set criteria. Once you havefound your desired property, your AIP can be processed into a full Mortgage Application. AnAIP with Abu Dhabi Finance is valid for 60 days.

Approval-in-Principle (AIP) renewal*If an Approval-in-Principle (AIP) letter expires, it can be renewed for a further period (of 60days with Abu Dhabi Finance) if required. Additional documentation may also be required.Refer to our Schedule of Standard Fees and Charges.

ArrearsThis is the sum of all monies due but not paid, including interest, fees and charges. Seealso Impaired Credit History.

AssignmentThis is the transfer of the rights to a property or asset from one person or party to another.An example would be the purchase of a property on a leasehold basis where the rights tothe property are assigned to a tenant for a set period of time through the signing of aleasehold agreement.

Bank Statements

Bank statements are used to enable Abu Dhabi Finance to assess how you manage yourfinancial affairs and to confirm your income.See Financial Accounts, Payslips and Salary Certificates for more information.

Building ContractorSee Mamlakaty. A Building Contractor will usually tender for a build project and will beappointed by a client by contract to build a Private Villa or Villas on Granted land. TheBuilding Contractor will obtain all of the required official approvals to build the Private Villaor Villas.

The Building Contractor has to submit a plan for the build detailing the number of phases

required to construct the Private Villa or Villas. It will also submit their Invoices at regularintervals to the Consultant. See Consultant. The Consultant will then arrange for paymentof the Invoices by either the client or a lender.

The Building Contractor will ask their bank to provide a Performance Bond or Guaranteefor the project, which protects the client and lender in the event of non-performance on thepart of the Building Contractor.

Buildings InsuranceMandatory for Townhouses and Villas onlyThis insurance policy will cover the costs involved in rebuilding or repairing the property ifthe property is destroyed or damaged. We will be happy to arrange this for you when you


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apply for a mortgage. Buildings Insurance can also be referred to as Home Insurance.

See also Contents Insurance and Reinstatement Value.

Buy-Out*A Buy-Out or remortgage is the process of moving your mortgage from one lender toanother. An Early Repayment Charge may be payable to your current lender in thesecircumstances. Buy-Out is also known as a Remortgage.

Central Bank (CB)The UAE Central Bank is a state organisation which directs monetary, credit and bankingpolicy to support the UAE economy and the stability of the UAE Dirham.

Change in Approval Terms*You can apply to change the terms upon which your mortgage has been agreed at anytime. For example, you may wish to increase the loan amount, change the repayment typeor amend the tenure or term of the loan. In these instances, your application may bereassessed. Change in Approval Terms can also be referred to as Changes to yourMortgage Application. Refer to our Schedule of Standard Fees and Charges.

Change in Payment Date*The Payment Date is the date each month by which you need to make a payment into yourmortgage account to cover your monthly mortgage instalments. If your circumstanceschange, for example, if the date you receive your salary changes, you can request a

change to your Payment Date. Refer to our Schedule of Standard Fees and Charges.

Change in Repayment Method*See also Repayment Method. You can apply to change the method by which yourmortgage is repaid at any time, subject to eligibility. Additional documentation may berequired. Refer to our Schedule of Standard Fees and Charges.

Change of Loan Maturity Date*Your Loan Maturity Date is the date by which your mortgage is due to be fully repaid. Youcan apply to change the date by which your mortgage is repaid at any time, subject tocriteria and approval by Abu Dhabi Finance. Fees or charges may also be payable to the

relevant Land Department or Developer to enable Abu Dhabi Finance to modify itsmortgage agreement relating to the property. Refer to our Schedule of Standard Fees andCharges.

Changes to your Mortgage Application*See Change in Approval Terms.

ChargesA charge is an amount of money paid to a company for providing a particular service.Charges may also be referred to as Fees.


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Clearance Letter*

A letter is issued by a lender after the full and final settlement of a mortgage or loan,certifying that a mortgage or loan has been repaid. Refer to our Schedule of Standard Feesand Charges.

Co-borrower relationshipThis applies to any additional borrower(s) whose name(s) appears on loan documents andwhose income and credit history are used to qualify for the loan. The co-borrower isconsidered to be jointly and severally liable for the total loan amount.

Commonhold or Ownership-in-CommonCommonhold exists where two or more owners of freeholder property in a single

development share the costs of running and maintaining shared services or facilities. This iscarried out by entering into a Commonhold Agreement and Commonhold property can be,for example, a communal garden or communal swimming pool. See also Freehold Titleand Freehold.

A Residents Committee is set up with mandatory membership by all parties to theCommonhold Agreement and the Committee decides how and when the costs for theupkeep of the communal property are to be paid.

Completion of Property PurchaseThis is the point where the money or final instalment for a property is paid to the seller or

the final instalment is paid for a property previously under construction. The legal ownershipof the property is transferred to the buyer or the property is handed over to the purchaser.

ConsultantSee Mamlakaty. When a UAE National wishes to build a Private Villa or Villas on Grantedland, they will appoint a Consultant by contract. The Consultant will generally be aprofessional firm which will project manage the construction of the Private Villa or Villasfrom start to finish. It will oversee the all phases of construction according to the ProjectPlan and ensure that the build is carried out to the required standards and to the clientsspecifications.

The Consultant will usually provide architectural services (or will invite tenders from aselection of architects) for the design and plans for the building project. The Consultant willalso request tenders for the build from a selection of Building Contractors. It is the clientschoice which Building Contractor will be appointed by contract to build the Private Villa orVillas.

Abu Dhabi Finance carries out Due Diligence on all Consultants for Mamlakaty andmaintains a list of Approved Consultants.


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Contents Insurance

This insures the contents of your home, such as furniture and personal possessions,against theft, loss and accidental damage. We will be happy to arrange this for you whenyou apply for a mortgage.

Currency of MortgageCurrently, Abu Dhabi Finance only provides mortgages in United Arab Emirates Dirham,although we reserve the right to convert the loan currency into any other currency for anypurpose, including but not limited to, for the purpose of registering the Mortgage Agreementor assessing the secured liabilities with a court or other competent authority.

Client Interest Rate

This is the rate at which interest is charged to a mortgage loan. Interest can be charged ona daily, monthly, quarterly, half-yearly or annual basis. The Client Interest Rate can also bereferred to as the Interest Rate or Nominal Rate.

Debt Burden Ratio (DBR)Debt Burden Ratios (DBRs) are used by lenders to assess the affordability of a loan for aclient.

To calculate the DBR we add up all your regular monthly liabilities, including your proposedmonthly mortgage instalment, and express these as a percentage of your allowable income.

DefaultA default on a mortgage occurs when a borrower fails to meet the Terms and Conditions ofa mortgage. The Loan Agreement will specify circumstances in which a default will occur,for example, if you do not make your mortgage instalment on the Due Date. See also LoanAgreement.

Defects Liability Period (DLP)Once a newly-built property is completed and handed over to the client, the BuildingContractor provides the client with a letter or certificate confirming that any major or minordefects in the property construction will be rectified at the property developers or buildingcontractors expense. The DLP is usually covered in the Fixed Price Contract and generally

runs for a period of 12 months after the completion date or handover date of the property.

Deferment of an Instalment*You can request to defer your monthly mortgage instalment until a later date at any time,subject to the terms and condition of the mortgage product you have chosen. You shouldbe aware that this will result in an increase in your future monthly mortgage instalments asthe expiry date of your mortgage is fixed when your mortgage is taken out. Deferment of aninstalment is also known as a Payment Holiday. Refer to our Schedule of Standard Feesand Charges.


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Deposit

This is money paid to the seller or developer in advance to show your intention to completethe purchase of a property. All Abu Dhabi Finance mortgages require a deposit and theminimum required is currently 20% for UAE Nationals and 25% for Expatriates of thepurchase price or valuation, whichever is lower. We will also ask you to provide evidence ofthe source of your deposit. See also Loan-to-Value. A deposit is also known as a DownPayment.

Direct Debit System (DDS)This is a means of payment to debit monthly recurring dues (instalments) upon preauthorised Direct Debit Authority, signed by the Payer, and forwarded by the Originator tothe Paying Bank.

DisbursementsOffplan PropertiesThese are monies payable to the Developer of a property in accordance with the agreedpayment schedule, as defined by the Sale and Purchase (SPA) agreement. See alsoOffplan property.

Discounted RateA discounted rate mortgage is where a lender gives a discount off its Standard VariableRate (see SVR) for a set period of time. At the end of the discounted rate period, intereston the mortgage is charged at the lenders SVR for the remaining term of the mortgage. Anapplication fee may be payable for a discounted mortgage rate.

Down PaymentSee Deposit.

Due DateWhen your Offer of Mortgage is issued, it will detail the date each month on which yourmonthly mortgage instalments are due to be paid. See also Change in Payment Date.Refer to our Schedule of Standard Fees and Charges.

Due DiligenceAbu Dhabi Finance will carry out a number of checks and investigate the suitability of

certain third parties, such as Consultants, to ensure that they have the necessary skills andexpertise to undertake the roles required of them. However, if Abu Dhabi Finance hascarried out Due Diligence and commences a business relationship with a third party, AbuDhabi Finance will not be liable for any negligence or non-performance on the part of thethird party.

Duplicate of Any Document*We can supply you with copies of documents we hold in connection with your MortgageApplication at any time. Refer to our Schedule of Standard Fees and Charges.


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Duplicate of statement*

A copy of statements we have previously issued to you can be supplied at any time. Wecan also supply you with ad-hoc statements at any time upon payment of the Duplicate ofStatement fee.

Early Repayment Charge*If your mortgage is subject to an Early Repayment Charge and you repay some or all ofyour mortgage during the Early Repayment Charge period, a charge may be payable. AbuDhabi Finance will, however, allow you to repay a set percentage (currently 20% unlessspecified otherwise) of the outstanding capital balance each year without charge.

Eligibility

Eligibility requirements must be met to qualify for a loan. The requirements will varydepending on the loan applied for, for example, some loans may be available only toowner-occupiers or for property investment purposes. Eligibility requirements will bedetailed to you by your Mortgage Advisor.

Equated Monthly Instalment (EMI)An Equated Monthly Instalment is the payment made each month on a repaymentmortgage, consisting of interest and a partial reduction towards the outstanding capitalbalance, to ensure that the mortgage is fully repaid by the end of the mortgage tenure orterm.

EquityThis is the difference between the value of a property and the total value of outstandingloans secured against the property. For example, if your property is valued at AED2,000,000 and the total value of the outstanding loans secured against the property is AED1,000,000, the equity in the property is AED 2,000,000 less AED 1,000,000 = AED1,000,000.

ExcessThis is the amount you will have to pay when claiming on a contents insurance policy. Forexample, if the excess on your contents insurance policy is AED 500 and you make a claimfor a damaged personal possession valued at AED 1,000, you will have to pay AED 500

and the insurance company will pay AED 500.

ExclusionsThe terms and conditions of most insurance policies will list items which are not covered bythe policy. For full details of what is and what isnt covered, you should always refer to yourpolicy document.

FeesSee Charges.


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Schedule of Standard Fees and Charges

This is a list of services which Abu Dhabi Finance provides together with details of the feesor charges payable for each service. A copy of the Schedule of Standard Fees andCharges charged by Abu Dhabi Finance is available from our website, www.adf.ae. Seealso Schedule of Standard Fees and Charges.

Financial AccountsThese are financial statements independently reviewed (and an opinion provided on) by anexternal auditor. The directors of the company are responsible for the preparation offinancial accounts. For self-employed mortgage applicants, financial accounts help inmeasuring and recording the transactions of the business. See also IFRS.

Fixed Price ContractSee Mamlakaty. When tendering for a project to build a Private Villa or Villas, a BuildingContractor will submit a plan for the build which will detail the amount and type of materialsto be used for the construction. The details can be found in the Bill of Quantities. This willbe incorporated into the overall Project Plan which will also specify the number of phaseswhich will be required to complete the build.

Abu Dhabi Finance requires the amount quoted to build the project is agreed on a fixed-price basis so that the full cost of any project is fixed before construction commences. AbuDhabi Finance also requires clients to provide evidence of contingency funds of at least15% of the amount of the Fixed Price Contract to cover any potential over-spend during the

construction of the project.

FreeholdFreehold title is the most superior form of private property ownership and is an interest inreal property not limited by time.

FreeholderA freeholder is considered to be the absolute owner of land and buildings represented bythe title to a property. Under Abu Dhabi Law No. 19 of 2005, only UAE Nationals and legalentities wholly owned by them can own Freehold property anywhere in Abu Dhabi. GCCNationals can own Freehold property in Designated Investment Zones, whilst non-GCC

foreign nationals can own apartment units or floors in buildings within DesignatedInvestment Zones, but not the underlying land. See also Commonhold.

Further AdvanceSee Additional Borrowing.

Granted landThe Government of Abu Dhabi has been granting land on behalf of the Ruler of Abu Dhabisince the late 1960s. The aim of this is to enable UAE Nationals to build their own home.Financial assistance for this is also available, including the National Housing Loan.


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Guaranteed Rate

A guaranteed rate is the interest rate you will pay on your mortgage for a set period of timeand a non-refundable application fee may be payable. At the end of the guaranteed rateperiod, the interest rate will normally revert to the lenders Standard Variable Rate orprevailing interest rate for the remaining tenure or term of the loan.A non-refundable application fee may be payable for a Guaranteed Rate.

Handover certificateThe handover certificate is a document signed by a property developer or BuildingContractor and a client which confirms that the client is happy to take over physicaloccupation of the property.

Home InsuranceTownhouses and Villas onlySee Buildings Insurance and also Contents Insurance.

Impaired Credit HistoryImpaired credit is where an applicant has incurred arrears on any previous loan or rentarrangement.

An impaired credit history may also include bankruptcy, court judgments or other defaults.See also Arrears.

International Financial Reporting Standards (IFRS)

A standard set of international accounting standards to which all Financial Accountssubmitted to a lender should conform. See also Financial Accounts.

Interest RateSee Client Interest Rate.

Interest Only MortgageSee Repayment Methods.

InstalmentAn instalment is one of a successive number of payments in the settlement of a debt. The

frequency of mortgage instalments is usually monthly.

Investment PropertyAn investment property is a property that is not occupied by the owner, usually purchasedspecifically to generate profit through rental income.

Know Your Customer (KYC)Know Your Customer (KYC) is the due diligence process that financial institutions mustperform to positively identify their clients and to find out information which is relevant toconducting financial business with them.


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Land Department

This is a government department responsible for recording property ownership. A fee willbe payable to the developer or land department to register the title to a property in yourname.

Late Payment Fee*A fee will apply if you do not make your monthly mortgage instalment by the due date.Refer to our Schedule of Standard Fees and Charges.

LeaseA lease is a legally binding agreement between a freeholder (or landlord) and a leaseholder(or tenant) which details the length of time of the lease and the agreed price or amount of

rent payable over a specified period of time.

Leasehold TitleA leaseholder acquires the right to use a property by a freeholder granting them a leasefor a set period of time (usually 99 years, or longer in some instances). The granting of thelease creates a landlord and tenant relationship.The granting of a lease to a leaseholder by a freeholder involves payment of aconsideration or rent which is a fixed amount of money paid by the leaseholder to thefreeholder at the time the lease is granted. A small annual fee may also be payable by theleaseholder to the freeholder and the leaseholder is also responsible for the payment ofservice charges which may apply to the property.

On expiry of the lease, the leaseholder gives vacant possession of the property back to thefreeholder, unless a further lease is being granted for which a further consideration will berequired.

In Abu Dhabi, leaseholds may be granted to foreigners in designated Investment Zones.Leasehold or Strata Law in Abu Dhabi is currently under review.

Length of ServiceThis is the length of time that you have been with a particular employer.

LiabilitiesLiabilities are any financial obligation you may have, such as, personal loans, mortgages orcredit card debts. If you have to pay rent once your loan from Abu Dhabi Finance is fullydisbursed, this will also be included as a financial liability when we carry out our affordabilitycheck. Eg. Credit card limits, car loans, personal loans etc

Liability Letter*You can request Abu Dhabi Finance to issue you with a Liability Letter which will confirmthe position on your mortgage. A Liability Letter is valid for 15 days and will take account ofthe current principal outstanding balance on your mortgage; interest accrued but not paid


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up to and including the next 15 days interest on your mortgage; payments due from you

and disbursements due on your behalf during the 15-day period. Check with OPS

LienA lien is a legal right to take possession of another persons property if a debt, loan orobligation is not met. When taking a charge over a property, Abu Dhabi Finance takes a lienover the property.

Life InsuranceThis is an insurance taken out on an insured party where the nominated beneficiaryreceives a payment if the insured party dies. Life Insurance can also be referred to as LoanProtection Insurance and can be assigned to a lender as part of the security for a loan.

Loan AgreementThis consists of a mortgage or loan offer and a document which details the Terms andConditions which apply to the mortgage or loan.

Loan Protection InsuranceAt Abu Dhabi Finance, our Loan Protection Insurance policy provides not only Lifeinsurance, but in addition, Permanent Total Disability and Terminal Illness benefits, subjectto terms and conditions. See Life Insurance.

Loan Purpose

This is the purpose for which a loan can be used, for example, property purchase, re-mortgage (or Buy-out) from another lender or Additional Borrowing / Further Advance.This is the ratio of the fair market value of a property or purchase price, whichever is lower,in relation to the value of the loan taken out to finance the purchase.

For example, if the loan taken out to buy a property is AED 1,000,000 and the lower of thefair market valuation or purchase price is AED 2,000,000, the LTV is (1,000,000 /2,000,000) x 100 = 50%.

At our sole discretion, we will lend up to LTV 80% for UAE Nationals and up to 75% forExpatriates. See also Down Payment.

Loan-To-Value (LTV)This is the ratio of the fair market value of a property or purchase price, whichever is lower,in relation to the value of the loan taken out to finance the purchase.For example, if the loan taken out to buy a property is AED 1,000,000 and the lower of thefair market valuation or purchase price is AED 2,000,000, the LTV is (1,000,000 /2,000,000) x 100 = 50%.

At our sole discretion, we will lend up to LTV 80% for UAE Nationals and up to 75% forExpatriates. See also Down Payment.


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Maintenance Charges

These are paid to the developer to cover the annual cost of maintaining or keeping a blockof flats, apartments or commonhold property in a good state of repair. Maintenance chargescan also be known as Service Charges.

MamlakatyA Mortgage Product from Abu Dhabi Finance designed specifically for UAE Nationals only.Mamlakaty helps clients to purchase a completed Private Villa, to release equity from acompleted Private Villa or to construct their own Private Villa on Granted land. Termsand conditions apply.

Market Value (MV)

The market value is the most probable price which a property should achieve in acompetitive and open market under all conditions required for a fair sale.

Memorandum of Understanding (MOU)This is a legal document outlining the terms and details of an agreement.

MortgageA mortgage is a loan which you use to buy your home or other property. The propertypurchased with the mortgage becomes the security for the loan.

Mortgage Advisor

Abu Dhabi Finance employs Mortgage Advisers (MAs) who will discuss your mortgagerequirements with you and who will lead and guide you through the mortgage process up tothe point when you are ready to sign your mortgage Offer Letter. Once you have signedyour mortgage Offer Letter, you will be assigned a Mortgage Companion who will leadand guide you through the remainder of the mortgage process.

Mortgage AmountThe minimum amount we will lend is AED 250,000 or AED 50,000 for additional borrowing(see also Further Advance). As a general rule, we do not have a maximum loan amount,but this is subject to UAE Central Bank regulations.

Mortgage Application FormOur Mortgage Application Form must be fully completed before it is submitted to ensurethat your mortgage application is processed as quickly and as smoothly as possible.You should also ensure that all of your Financial Liabilities, for example, other mortgageloans or personal loans are fully declared when you complete the Mortgage ApplicationForm.

Mortgage CompanionOnce you have signed your Offer Letter, a Mortgage Companion will help you with themortgage registration and transfer process and will remain your point of contact for allfuture queries and request concerning your mortgage.


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Mortgage Loan Balance

This is the total sum outstanding on a mortgage loan at any one point in time and is madeup of the outstanding capital amount owing plus interest accrued to-date but not paidtogether with any unpaid fees and charges.

Mortgage OfferThis is an offer in writing to lend money on a property. See also Offer of Mortgage.

Multiple ApplicantsThis applies where there is more than one client applying for a mortgage (maximum of two).

Multiple Properties

This situation applies where you are buying and applying for mortgage finance for morethan one property. Abu Dhabi Finance will lend on up to three properties per client onproperties in Abu Dhabi and Dubai. The number of properties on which Abu Dhabi Financewill lend is at the sole discretion of Abu Dhabi Finance.

Musataha TitleThis is a type of leasehold and is a legal right to build on and retain the building on anotherpersons land for a fixed term of years. The maximum period is 50 years and on expiry ofthe term, the period may be extended upon mutual agreement by both parties. Musataha isusually granted to a tenant through a Ground Development Lease.

Net Purchase PriceThis is the amount payable by a client after any discount is taken into account, excludingany fees.

No Objection Certificate*A No Objection Certificate (NOC) is a written confirmation that an interested party such as alender has no objection to the property being sold. An NOC will be required before amortgaged property can be sold and will be supplied by the current lender.

In addition, if a developer has agreed to the cancellation of a property purchase, Abu DhabiFinance will issue you with an NOC confirming our agreement to the repayment of your

loan, subject to terms and conditions.

Offer of MortgageSee Mortgage Offer.

Offer Letter Renewal*Offer Letters are valid for a set period of time from the date of issue which will be detailed inyour Offer Letter. Abu Dhabi Finance Offer Letters are valid for a period of 30 calendardays. If the Offer Letter has expired and a new Offer Letter is required, for example if theoriginal Offer was not accepted or the loan has not been drawn down within a set period oftime, a new Offer Letter can be provided, subject to a re-assessment of your financial


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circumstances and additional documentation may be required. Refer to fees and charges.

(Check with ops)

Offplan propertyThis is a property due to be constructed or under construction and not yet completed. Seealso Disbursements Offplan Properties.

Owner-occupierAn owner-occupier is someone purchasing a property in which they will live as their mainresidence.

Part and Part

See Repayment Methods.

Payment Holiday*See Deferment of an Instalment.

Pay Slips and Salary CertificatesThese are the original documents detailing your salary or wages paid, less any sums ofmoney deducted by your employer at source. They must be dated maximum 30 dayspreviously. Check with Mike

Permanent change in payment mode*

A permanent change in payment mode is where you change the way in which you pay yourmonthly mortgage repayments, for example, changing your payments by cheque to aStanding Instruction Order. Refer to fees and charges

Processing FeeA non-refundable processing fee is part of the charge for a mortgage loan. Refer to feesand charges

Proof of AddressProof of Address is required to show that you live at the address specified in your MortgageApplication.

PurposeAbu Dhabi Finance will lend for the following purposes:

Property purchase

Further Advance / Additional Borrowing for existing Abu Dhabi Finance borrowers

Remortgages from other lenders with or without Equity Release.

Investment property purchase.


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Registration of Mortgage

By Law, mortgages are required to be registered with a developer and relevant registrationauthority for which a fee may be payable to the developer or relevant registration authority.

Reinstatement ValueThe Reinstatement Value of a property is the cost of replacing the property with the exactspecification and age at todays value with consideration to depreciation and the currentcost of construction. The cost of construction will include:

a) Professional fees, preliminary assessment and contingency costs;b) An inflation factor in respect to:-

i. Lead time for demolition and building approval;

ii. Construction period;c) Extra costs of reinstatement;d) An estimate for re-housing or loss of rent;

Removal of debris, excluding any allowance for the safe removal of any unknownhazardous materials.

Replacement ValueSee Reinstatement Value.

Remove a Borrower*

You can choose to remove a borrower from a joint mortgage at any time, subject toassessment, our agreement and amendment to the Sale and Purchase Agreement (seeSPA). See also Add a Borrower.

RemortgageSee Buy-Out.

Repayment MethodsThere are various methods you can choose to repay a mortgage loan. These are:

Interest-Only - With an Interest-Only loan, your monthly payments cover the

interest and no capital is repaid. As you are repaying only the interest, your

monthly payments are lower than a similar value Repayment loan. However, over

the longer term, an Interest-Only loan will typically cost more money than a

similar value Repayment loan as the balance that interest is calculated on will not

have reduced. Furthermore, you would still need to find a way to repay the capital

at the end of your mortgage loan term. An Interest-Only repayment method can

be selected for both under-construction property phases as well as completed

property phases. Please note that you will be eligible to borrow a lower proportion

of the value (or purchase price) of your property if you select this repayment

method during the completed property phase.


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Repayment With a Repayment loan, your monthly payments are made up of

two elements; one to pay the interest and one to repay the capital. During theinitial stages of the loan, the majority of your monthly payments cover interest

although some capital is repaid. Over time, as the capital is reduced, less interest

is charged and more capital is repaid reducing your loan further. The exact

proportion of capital repaid in relation to interest paid is dependent on the term of

the loan. A shorter term generally means that you will start to pay more capital

than interest at an earlier stage. A Repayment loan is the only option that will

guarantee to repay your loan over a defined term provided that you keep up with

payments. Repayment loans are only available during the completed property

phase.

Part and Part With a Part and Part loan, a proportion of the loan is treated as

Interest-Only and a proportion of the loan is treated as Repayment. Therefore

you will still need to find a way to repay a proportion of the outstanding capital at

the end of your mortgage loan term. Your monthly repayments are lower than a

similar value Repayment loan, however, higher than a similar value Interest-Only

loan as the payments made will include an element of capital repayment. Over

the longer term, you would pay more interest on a Part and Part loan than on a

similar value Repayment loan, as more of the debt remains unpaid throughout

the term. Please note that you will be eligible to borrow a lower proportion of the

value (or purchase price) of your property if you select this repayment method.Part and Part loans are only available during the completed property phase.

Repayment MortgageSee Repayment Methods.

Restricted Applicant Profile (RAP)There are certain categories of mortgage applicant to which Abu Dhabi Finance is notpermitted to lend due to legal or regulatory considerations. For example, a valid UAEResidency Visa is required before Abu Dhabi Finance will consider lending to nationals ofspecific countries.

Salaried ApplicantA salaried applicant is someone who is employed by a company and is paid a monthlysalary.

Sale and Purchase Agreement (SPA)This is a written contract signed by the buyer and seller of a property which details theterms and conditions under which a property will be sold.


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Unconditional Payment Order

When you apply for a mortgage with Abu Dhabi Finance, we will ask you for a signedundated cheque which may be used to cover the full repayment of your mortgage includingunpaid fees, charges and interest accrued but not paid in the event that you default on yourmortgage.

If the cheque is unpaid, this constitutes a criminal offence and may lead to legal actionbeing taken against you.

For joint accounts (a mortgage loan in two names), a cheque drawn on a joint account isrequired, or if no joint account exists, a cheque from each borrower for the full amount ofthe loan is required.

Self-employed Applicant(s)A self-employed applicant runs their own business as a sole proprietor, owns a 5% share ina business or is a partner owning a share in a partnership business.

Service ChargesSee Maintenance Charges.

Standard Lending RateSee Abu Dhabi Finance Rate.

Standard Prevailing Interest RateSee Standard Variable Rate.

Standard Variable Rate (SVR)This is the standard rate paid by clients and is generally made up of a lenders BaseLending Rate plus a margin to give the Client Interest Rate. It is a general interest ratewhich is set in line with current mortgage market conditions and rates offered bycompetitors. SVR can also be referred to as Variable Rate.

Standing Instruction OrderFor Non-Resident or Compass scheme mortgages, EMIs or monthly instalments are

collected by Abu Dhabi Finance by Standing Instruction Order (SIO). An SIO is a writteninstruction to your bank to pay a stated amount of money to a beneficiarys bank account atregular intervals. An SIO remains in place until amended or cancelled.

Tariff of ChargesSee Schedule of Standard Fees and Charges.

Tenure or Term of a MortgageThe tenure or term of a mortgage is the period over which the mortgage is taken. AbuDhabi Finance will lend for a minimum period of three years and up to a maximum period of25 years, subject to eligibility.


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Terms and Conditions

The Terms and Conditions applicable to a loan or mortgage are specified in a documentwhich details the restrictions which apply to the specific mortgage.

TranslationsWhere documentation is received in languages other than Arabic or English, it must betranslated into Arabic or English.

Unconditional Payment InstructionSee Security Cheque.

Valuation Report*

A Valuation Report details a professional valuers opinion of the current fair market value ofa property.

Variable RateSee Standard Variable Rate.

VisaA visa is an official authorisation allowing a person to live and / or work in a different countryto that to which they hold citizenship.

*A fee will be charged for this service, as detailed in our Schedule of Standard Fees andCharges. A copy of the list will be given to you by your Mortgage Advisor. The service issubject to our approval and product parameters.

Please note: The definitions provided in this Glossary of Mortgage Terms are for guidanceonly. If there is a conflict between a definition provided in this Glossary of Mortgage Termsand a definition contained within the Abu Dhabi Finance Loan Agreement, the definitioncontained within the Abu Dhabi Finance Loan Agreement will take priority.

abu dhabi finance-glossary

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