Getting onto the real estate is one of the prime decisions one makes in his life and getting a mortgage may seem like an intimidating task, but it’s not that tricky and there are ways you can increase your chances and certainly, it pays to do so prudently. And before committing to a long-term investment, it is important to have a clear insight of different measures to make decision shrewdly. So, wisely look into

Mortgage Rates

The mortgage rates are defined in the fixed and adjustable rate. In fixed rate, the borrower knows precisely how much monthly payment amount would be and so, it is easy to endure the personal budget, irrespective of the market vacillation. When the mortgage interest rates are going up, a fixed mortgage plan is recommended, but when there is a downfall in rates, choose adjustable mortgage rates. Usually, most banks have one, two or three year fixed rate following which the variable rate plus the current EIBOR rate comes into effect, normally these rates will be higher than the initial fixed rate, so sagaciously shop around.

Loan to Value

How much you can borrow, it depends on your age, nature of income source, credit score, foretold imminent expenses and the lenders. As per the Central Bank Regulations the total DBR (Debt Burden Ratio) cannot surpass half of the income also, in addition to that the maximum financing amount allowed for UAE National is up to eight years yearly income and for expats is up to seven years of yearly salary. The maximum Loan to Value and the interest rates deviates among different lenders. As per the guideline by Central Bank, if an expatriate buys a property less or equal than Dh5 million, then he will be qualified for a maximum 75 per cent of the property value and if it is more than Dh5 million then 65 per cent of the property value. For second property or subsequent, it is 60 per cent of the value of the property. Similarly, for UAE national purchase a property less or equal than Dh5 million, he will be eligible for a maximum 80 per cent of the property value and for more than Dh5 million, the maximum is 70 per cent of the property value. For second property or subsequent investment, he can borrow 65 per cent of the property value. For off plan purchase the Central Bank putted the standard LTV, 50 per cent regardless of purpose, value or category of purchaser.

Standby Cash

Buyer should have a good cash reserve of 25 per cent to 30 per cent of the property purchase price, and then definitely the deposit will not be a big hurdle on your investment plan. Likewise, there are additional fees associated with the mortgage loan that would be around 7-8 per cent of the property value.

Process

Mortgage process involves a series of steps completed in two to three weeks. Once the preliminary valuation is conducted on the provided applicant’s documents, the lender offers pre-approval letter. Afterward, you have to shop around for the property in your desired development, keeping in line the affordability amount. And once the MOU is signed the required documents are submitted to the lender for evaluation and thereafter, the financial institution draft the final offer letter as per the agreed terms and conditions. And further, the property transfer takes place in the land department after attaining NOC from the developer. The mortgage process is lengthy and can be time-consuming hence, using the valuable and impartial advice of a mortgage consultant can be of great benefit and help you to save time and money by identifying the bespoke mortgage solution that fit into your investment budget. Unnecessary outgoings or regularly going overdrawn hamper your mortgage ambitions. So act smartly!

If you need any assistance, let our certified independent mortgage consultant help you to plan your investment in Dubai. 4C Mortgage Consultants provide best customized mortgage consultancy for a resale property, new purchase property, off plan purchase, construction mortgage, project finance, commercial mortgage, buyout, equity release, Non-UAE Resident, Debt Restructuring in Dubai. Follow us on Twitter, Facebook, and LinkedIn and keep yourself updated.