Homebuyers must get mortgage pre-approval to verify their budget before shopping for properties to buy. Meanwhile, expats are required to pay a down payment of 25% of the value of a property that is worth at most Dh5 million.
Gone are the days where the Dubai real estate market was dimmed to be volatile and unpredictable. Today, thousands have acquired properties in the city, thanks to the help of home loans that fund their purchase.
Many factors come to play when it comes to obtaining a home loan- from the upfront charges to choosing the duration of the mortgage and whether to choose a fixed interest rate or a variable.
Starting with the Costs.
As aforementioned, the UAE Central Bank requires expats to pay a deposit of 25% of property value. There is also a 4 % transfer fee and 0.25% mortgage registration based on the loan amount.
You will also be required to pay a 2% agency fee. The valuation fees range between AED2000- AED3000, while the loan establishment charges run up to 1% of the home loan.
This sums up to approximately 5-7%. For instance, purchasing a property in Dubai for Dh2 million would attract additional fees of more than Dh100,000, as reported by mortgagefinder.ae.
THE GOOD NEWS, some banks, and financial lenders are now willing to give home loan borrowers to add 75% of these purchase costs to their mortgage, consequently reducing the amount you would pay up upfront by up to Dh75,000, and even more for the UAE nationals.
Review Your UAE Credit History
For starters, you cannot transfer your credit records to another country. As such, it is crucial to have a great credit history in the UAE to indicate your credibility when it comes to paying up debts.
So, it would be best to know this critical information ahead of.
Connect with a Mortgage Agent
A mortgage broker has the experience and a good rapport with banks and other financial institutions. They can help you secure a good home loan offer that suits your needs and update you on changes in Central bank regulations, not forgetting to help with paperwork for the application.
Have All Your Documents in Place
Your probability of securing a home loan in Dubai is partly dependent on how you will present yourself to the financial lender, in the application. If you can prove that you are a credible investment with lost risk, then your chances of getting a mortgage are high.
What’s Your Budget Before the Home Loan?
Most homebuyers fall victims to large home loans that banks offer. Before you stretch yourself to debts, have a keen look at your finances, and ensure you figure out a home mortgage budget that you can afford.
Banks analyze your finances before they approve your mortgage. So, it would be smart to beat them to it. Using the help of a property consultant, mortgage agent, or mortgage calculator, you can be able to see your monthly mortgage fees.
Be Honest to Yourself and The Financier
There is no benefit in inflating your financial health or presenting yourself falsely. The market has numerous mortgage products available for choosing. You want to secure a deal that fits your needs and situations instead of having your application vetoed because of misinformation.
