Generally, Mortgages are a good debt as property, or real estate typically appreciates no matter what, but that doesn’t mean you should get a mortgage without doing proper research. Mortgage services may seem like a dry and dull topic, but there are some pretty important things that you need to know before buying a mortgage. Here is more on it:-
- Mortgages Require A Lot of Paperwork: If you’re planning to apply for a mortgage, you should keep in mind that mortgages require a lot of paperwork. You should keep your financial records intact before applying for a mortgage. The lenders can ask you for a month of recent statements, at least two years of tax filings, and other bank account statements. You’ll also be asked to provide supporting documents to explain recent large deposits or withdrawals if any.
Talk to the UAE’s best mortgage advisor
We can help with all of your home loans and commercial finance needs - Mortgage Prequalification & Preapproval Aren’t The Same Things: Mortgage prequalification and preapproval are steps you take before making an offer on your dream house, but they aren’t the same things. Mortgage prequalification or conditional approval is the best way to know how much you’re eligible to borrow. Prequalification will give you an estimate of how much you can borrow based on your income, credit history, job stability, and bank information.
Preapproval comes from the bank once they’ve analyzed your financial history carefully. They then offer you an amount to lend and what interest rate they’ll charge you. Mortgage Preapproval in Dubai doesn’t guarantee you a mortgage, but if all the key factors stay the same for long, you can get your hands on your dream property. - The Higher Your Credit Score, The Better: Buyers with lower credit scores tend to have higher interest rates and end up paying a lot more for their mortgages. Before applying for a loan, ensure that your credit report is clear and error-free. If your credit score is less than 620, you won’t be offered a loan at all. Therefore, the higher your credit score is, the better your chances of securing a mortgage with low interest rates.
You can boost your credit score by paying off the remaining outstanding debts, including your credit card balance and other loans. Opening a new bank account also lowers your credit score, so avoid getting new credit cards, personal loans, or anything that involves the need for a new credit check. - The Lenders Value Job Stability: Where your good credit history and the size of your down payment increase your chances of securing a mortgage, an unstable job can break the case for you. If you’ve been unemployed for long or continuously changed companies, it’ll make your lenders nervous. So if you’re considering buying a mortgage, try not to change your company for now and if you’ve done anything like that, then forget about securing a mortgage. Once the mortgage is approved, you may get back on your journey to exploring new career opportunities.
- Mortgage Rates Fluctuate Daily: Mortgage rates are not set in stone and can fluctuate daily. So, if you’re shopping for a mortgage, you need to be prepared to lock in a rate as soon as you find the one that you’re happy with. Mortgages are offered in two interest rate models, a fixed rate and a variable one. If the industry is forecasting a downhill in the interest rate in the future, you may opt for the flexible rate, but that is a rarity, so always go for the fixed rate.
