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What I Wish I Knew About Mortgages in Dubai

Learning the ins and out of getting a mortgage in Dubai is an essential step to investing better. Previously, we covered some basic understanding and criteria of expat mortgages in Dubai. The tricky part is, there are also certain things new home buyers wished they had known so they don’t have to learn the hard way.  

To help you be better equipped, we put this question out and home buyers responded. Here is a look at what first-time property owners wish they knew about getting a mortgage in Dubai before applying.

What Home Buyers Wish They Knew About… Getting a Mortgage in Dubai 

My experience is that banks here take REALLY long time to do anything, so if you plan to buy in 3-4 months, you should already look for brokers who help you with that. You can also go directly to the bank too.

If it’s a ‘mortgage to mortgage’ purchase, you may start paying your mortgage 6 to 10 weeks before your get possession of the property.

Don’t pay conveyance fees to the agency. Not required. Negotiate. Be tough on this.

For those that don’t understand it, this conveyance fees is essentially money that brokerages charge you for work that’s actually supposed to be done by your agent, and what you’re paying the agency fee of 2% for to begin with. They charge this so they can hire someone to push papers while their agents have more time selling.

Go through a broker that you can trust and that doesn’t charge for their service (they get paid by banks). They typically know a lot more than you can find or understand by yourself (i.e. bank policies, hidden charges, service standards, where you will benefit or where you get penalised). And, if you find one that acts in your interest it can be a blessing. One way to find a good broker is to look at google reviews of the company. They give a lot of information.

What Home Buyers Wish They Knew About… Mortgage Rates in Dubai

Mortgage rates change daily, therefore, so be ready to lock in a rate as soon as you find one that you like. Mortgages are either fixed or variable. You might choose the flexible rate if the market anticipates a future decline in interest rates, but this is a rare occurrence, so always choose the fixed rate.

Always go for the lowest margin, that’s what you end up paying for the largest part of the loan. For example, if you get a 3 year fixed rate on a 25 year mortgage, you’re paying the margin for 22 years. Hence that number matters the most.

Get a mortgage that has relaxed partial or early settlement options. Being in Dubai, chances are you will either sell your property in the next few years or you will end up paying off your loan early. As per data that’s what everyone who’s ever had a mortgage here has done, literally.

It’s OK to….

Shop around when you’re closer to getting ready to lock in a rate. You are not obligated to work with the lender who pre-approved you.

Switch banks. If you’re unhappy with your current rate, you always have the option to get into a longer fixed rate mortgage. If you’re actually paying that much more, you would recover your cost of switching in no time and start saving money. However, I can tell you for sure you will be here 3 years from now, unhappy about the margin you have to pay then if the rates drop while you’re on the fixed rate.

Bottom Line

If you plan ahead and anticipate challenges that may come up, you’ll be able to overcome hurdles buyers face and have a smoother journey.

It’s valuable to take the time to shop around through a mortgage broker and research what’s available in the market, to ensure you’re getting the best possible outcome for your situation.

Next: Who Are the Best Mortgage Brokers in Dubai?