All You Should Know On Home Loan Pre-Approval in Dubai
When looking for property for sale in Dubai, you must factor in various considerations first. One of the key considerations is the home loan. The process of finding Dubai homes for sale rely on it. There are other equally important factors like location, family needs, and so on.
Nonetheless, money takes the lead. If you have insufficient funds, it is nearly impossible to find a good deal on a Dubai property.
Simply put, a mortgage loan is normally preapproved before the buy starts to look for property for sale in Dubai. This gives them the surety they will have money during the purchase. In this article, we share important information regarding home loan preapproval that we believe you should familiarize yourself with.
Benefits of Home-Preapproved Mortgage Loan in Dubai
Good for Estimation
Firstly, a home loan gives you a rough sketch of the kind of real estate Dubai home your budget can afford, saving you a lot of headaches you could have gotten in the future after realizing you cannot afford your dream home.
A mortgage home loan guarantees improved security. If you are the buyer, you should pay a down payment of 10% when signing the sales contract. If you do not organize your funds during the sale of property in Dubai, you will not receive the initial deposit. But you don’t have such issues when you have approved funds.
Before you apply for a mortgage loan to buy an apartment in Dubai or any other property type, you should get familiar with upfront fees. These are fees for DLD, down payment, and real estate agent fees. The Central Bank of UAE requires all foreigners to pay a down payment of at least 20% of the value of a Dubai property if it costs at most AED 5M.
We also have a mortgage registration fee of .25%, DLD fees of 4%. All these are factored in the preapproved mortgage loan. Your Dubai property market broker will receive 2% for their services. In some scenarios, you may have to pay a mortgage loan setup fee— usually 1% of the loan amount.
Applying for a loan from a Bank or Mortgage Lender
Seeking financial assistance from either of these options is a good thing. But keep in mind, each avenue has its advantages and disadvantages. It would be wise, therefore, to assess them before you make any decision.
If you choose to work with a bank, keep in mind, different banks have varying policies. And the same is true for the fees they charge. Note also, most banks are very strict when it comes to satisfying the requirements.