Getting a home is a big step in life getting a house in Dubai is a pleasant idea. Getting a loan for your home is another decision that you need to rethink over before making that decision.
This is because home mortgage can exceed many years to be paid off. You can spend up to 25 years paying a loan you took in your twenties so before you can consider taking a home mortgage, consider the following.
- The home mortgage is expensive long-term.
Mortgages is an expensive decision long-term compared to buying a house. However, it is much affordable, on a short time if affordable though as you can pay from a percentage of your income.
Most lenders require a life insurance policy on the house once they award you the home mortgage just to avoid the risks that might come in future and cause payment a difficulty. If you do your calculation for the long run, you will be paying the actual full cost of the house plus the interest rates of the lenders and the insurance policy. While home mortgage might be a solution, saving up for a house might be another that you can consider.
- You need to have a reliable income.
No one is going to award a home mortgage to a jobless person with no source of reliable income. One has to prove to the lenders that he or she can pay for the house, just not in that year but in many more years to come. For that reason, civil servants are awarded more mortgages than the rest as their chances of staying employed is higher than a private sector employee who job is vulnerable to many factors.
This might not only involve you but your employers. If your employers, let’s say a company for an organization has higher risks to backups or are exhibiting losses over a period, the assumption that workers will be laid off are higher, reducing your chances of earning a home mortgage.
- You need to have a good CRB (Credit Reference Bureau).
Having a good salary and a guaranteed job will not promise you an instant home mortgage. You need to have a positive financial record that you have been paying your loans and in time.
This proves to the bank that you intend to seek a home mortgage that you can be dedicated to paying your monthly dues. Sometimes it will require you to take a loan and just pay it off even when you don’t need it to get you a loan review. This will not only help you in your financial records that could be used anywhere but also in getting another loan apart from home mortgage.
- You need mortgage payment protection insurance.
There are some of the things that can make you unable to pay your home mortgage. One of them being sickness, accidents and even death. If this happens, one might lose the house in general or leave the burden to the next of kin.
Get an insurance that covers you against this and pays your dues when you cannot is highly advisable. In some home mortgage Dubai, they might require you to have the home mortgage payment protection insurance.
- You practically do not own the house.
Let us get this straight; the house is your only when you have completed paying for it. If you fail to pay the loan, then you will lose the house eventually. Your lenders own the house, and the moment, you fail to pay up, they will liquidate the property and recover the money they had lost.
- Your monthly payment may vary from time to time.
Payments can be fixed or with a variable interest. Other policies even allow you to have a holiday home mortgage where you will not pay anything for certain period. Always check the plans available and choose your preference from the home mortgage rates possible.
- You can remortgage your house in future.
Over the years you might find that the policy you chose isn’t working for you, you can approach the lender and ask for a new deal. This is called remortgaging and you can select your current dealer or a new lender.
- You can pay your mortgage early.
You can pay your mortgage early and reduce the period in which you can pay your home mortgage and gain full ownership of the house. Home Mortgage works like rent.
You pay for the house every month until you complete the payment of the house with interest in the bank. If you can pay all the money at once and avoid the home mortgage rates accumulation when you can afford it, then why not?
Paying off early will relieve you of the mortgage burden, and you will eventually have the house to yourself. You can ask your bank how much you still owe them or use an online calculator. If you are in Dubai, just type ‘home mortgage calculator Dubai ‘ in your search engine and various suggestions will pop up.
- Negative equity can affect your remortgaging.
Real estate has dynamic worth. This means that it changes over time and can be higher than your initial worth or lower than your initial worth. If the value is lower, then your home has negative equity, and if your home has a higher cost than you have positive equity.
Remortgaging your house will depend on the equity. Negative equity will have a harder time remortgaging than a positive equity. Consult a home mortgage consultant to find out that the worth of your house according to the current markets
- You can take a break for your monthly home mortgage repayment.
Yes, you can take a break from paying your monthly mortgage repayment. This kind of deal is not available to all home mortgage Dubai. Some pay extra on their monthly mortgage payment which relieves them from other months.
It can also reduce monthly payment for a period and some other bankers, or lenders give their clients a holiday home mortgage as part of their financial package consult a home mortgage consultant in Dubai for information about the banks that offer this service.
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