Taking a mortgage loan can be a daunting task as it requires a considerable amount of strategic and financial planning which can consume a lot of your effort and time. Furthermore, you will be able to find a suitable mortgage loan only if your financial records appeal to the lender. To make things easier, here are a few ways to help you get the best mortgage deal in the UAE.
Get your credit report
A credit report is a document explaining your past and present credit activities and highlights any defaults made in your repayments. Al Etihad Credit Bureau (AECB) has started providing credit reports for individuals and corporates. Banks can avail this report from the bureau which enables them to assess the risk profile of the applicant while granting a loan.
It is important to maintain a decent credit score to facilitate faster loan approval. You can achieve this by making repayments on time and also clearing any outstanding debts, if any. A higher credit score means a lower risk attached, thus increasing your chances of getting the loan.
Compare banks and find the true cost of the loan
It is advisable to compare mortgage loans offered by various banks before making a loan application. Aspects like the loan to value ratio, interest rate, minimum salary requirement, settlement charges and processing fees for the loan need to be considered. Find out what type of interest rate i.e. fixed or variable is suitable for you. Note that banks usually have different requirements for salaried and self-employed individuals. Also, if you are an expat, try and find banks that provide loans specifically designed for expats. Such banks usually offer low interest rates and can also help improve your credit rating.
You can compare mortgage loans offered by banks in the UAE by clicking (here)
Find out the true cost of your loan by adding extra charges like processing fee, arrangement fee, mortgage brokerage commission and registration fees to your interest amount. This will help you get an estimate of the total expenses, so you can make suitable arrangements to accommodate them.
Get through the pre-qualification process
It is preferable to opt for a pre-qualification process to find out your eligibility for the loan and also determine the amount of loan you can borrow. You can shortlist banks that are most suitable to you after comparing them in various aspects listed above. Approach these banks and get though the pre-qualification process laid out for each of them. This will enable you to compare the maximum amounts you can borrow from each of these banks along with the additional costs. Note that banks usually evaluate aspects like your liabilities, assets and income during the pre-qualification process.
Increase your down payment
Depending on whether you are an expat or a UAE national, banks will typically require a down payment of 20% of your total mortgage loan. Alternatively, you can also make a higher down payment and negotiate with your lender to get a lower interest rate on your loan.
Compare down payments offered by banks in the UAE by clicking here (http://dubaifinance.com/home-loans).
Check your employment and income record
Banks usually prefer candidates having a steady employment and income record while granting a loan. Check your record to see if you have any long gaps of unemployment in your career, as this will lower your chances of getting your loan approved. A declining income record over the past few years can also ruin your possibilities of getting a loan. Many banks have a minimum monthly salary requirement to be eligible for the loan. Confirm with your bank to see if you fulfil these requirements.
Know your law
It is important to stay updated with changes in mortgage laws as this can determine your eligibility for a mortgage loan. Recent changes in mortgage laws in the UAE state that the total financing for expats cannot exceed seven years of their annual income and for nationals it cannot exceed eight years of their annual income. Additionally, as per the new amendments, your total repayments cannot exceed 50% of your monthly income. Check your records to see if you fulfil these requirements.
Apart from the above, it is advisable to get the mortgage amount approved from your bank prior to finding any potential properties. This will help you select a property that falls within the estimated amount, thus saving your time and effort.
Get started with finding the best mortgage loans in the UAE at (Dubai Finance).