Six Tips for Obtaining a Bank Loan to Buy a Home in Dubai

Bank Loan

Dubai is name luxuries with the outstanding lifestyle and appreciative attractions that can allure the heart of anyone. Living in Dubai and having their own house in the town is the treasure, and everyone is looking for one.

Are you also looking to buy home in Dubai? Although there are a lot of properties in Dubai, such as apartments, penthouses, townhouses, or villas for sale in Dubai. But it is not easy to buy a property in the city.

You have to take care of the palnning the whole process to buy a house in Dubai. From finding the right house in a suitable area to the legal buying procedure. But the more important thing is the payment. There are two ways to buy a house in Dubai – whether you pay in cash or decide to get a mortgage.

Although, with a bank loan, you can have more flexibility in managing the finance as per your need. We get you six amazing tips for obtaining a bank loan to buy a house in Dubai. So, without any delay, let’s head to the tips.

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Find The Right Plan And Bank

Before applying for a mortgage, you have to research the banks in Dubai and their loan plan. Different banks have different policies, and you must ensure that you are getting yourself the right plan. The popular banks in Dubai for loans are Dubai Islamic Bank, Emirates National Bank of Dubai. Standard Chartered, Mashreq Neo, Abu Dhabi Islamic Bank, etc.

These banks have flexible plans for you. Proper research about the banks and their plan can help you in choosing the right plan according to your financial state and ease of the payments. 

Secure The Downpayment

What are the biggest costs you can face upfront with your mortgage? – the Downpayment. It is considered as a good-faith deposit of the sorts. The expats who want to get a mortgage in Dubai, it requires a minimum of twenty percent deposits. Usually, in many other counters, you are allowed to get a mortgage of ninety-five percent. But in UAE, you can only take a mortgage up to eighty percent.   

Relevant: How do you obtain approval for an off plan mortgage?

So, before you begin to explore the properties to buy, ensure that you decide how are going to manage the twenty percent Down Payment. In Dubai, some banks track your source of Downpayment. That is why you must have savings or investments. Only by this, you can get a good grip on your finances and can establish where your will be sourcing the amount from.

Get Your Documents Ready

When you are getting a mortgage, it requires Paperwork. So, you have to stay organized and get the papers ready. There are some basic documents that you will need while getting a loan.

  • Your passport copies
  • Visa
  • Emirates ID
  • Certificate of your salary
  • For self-employed individuals, a trade license
  • Bank statement

In some cases, you also require supporting documents that verify employment, liabilities, and sources of income.

Keep A Check On Your Credit

Credit Score

If the bank wants to evaluate by yourself what kind of borrower you are or will be, it will carry out your credit checks.

The credit scores reflect how you manage your finances. It is good for your rating if you have a long track of responsible and clear credit use. Otherwise, missed payments, mortgage defaults, and bankruptcy shows the bad credit scores and will hang a red flag on your chances to get a mortgage.

AI Etihad Credit Bureau, or AECB is responsible to issue credit reposts in Dubai. So, to obtain a loan from a bank in Dubai, check out your credit scores through the official website of AECB.

Increase Your Borrowing Authority

If we talk about the general perspective, the banks limit the loan lending to no more than 25% of the monthly income of the applier. You have to pay attention to the outstanding debts. It usually includes credit cards, personal loans, lease agreements, car loans, and all the other ongoing financial commitments.  

After deducting all of these amounts, the left number on your account is your disposable income. The banks are using this to assess how much you can afford in the repayments.

Tenure And Fees Consideration

The maximum year you get to repay in Dubai is 25 years. When you are looking for the best mortgage, you must look for the interest rates because it matters. If you choose the longer tenure, it will cost you less per month. However, if you are choosing a longer tenure, you have to pay more in total because of higher interest. On the other hand, a shorter tenure will cost you more monthly, but you can pay less in total because it charges lower interest rates.  

But the interest rates are not the only thing. You have to take care of the penalty fees, setup, and conveyancing.

Relevant: Is Getting a Mortgage When Buying a Home in Dubai a Smart Move?

A Pre-Approval For The Mortgage

If you are buying a home, you must have increased your confidence and buying power by getting the pre-approval of your mortgage. First, the pre-approval will give you an idea and let you know how much you can spend. Second, you will also be able to look for a great mortgage rate offer ahead of time. And at last, it gives a green signal to the sellers that you have no problem reacting to finance the -purchase, making them more likely to accept the offer.     

Conclusion

Obtaining a loan to buy a house in Dubai will become easy for you if you consider these tips. Getting a mortgage is always a critical procedure, and it requires a lot of knowledge and understanding. Keep yourself up to date and limit and ensure that you are on the right track. Follow the tips mentioned above and buy the house of your dreams in Dubai without any trouble. All of these tips are proven by experts, and many buyers used them to buy houses with ease in finance.

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