Time to buy? Much as we’d all like to jump in as cash buyers, sometimes the reality is that we need some financial support from a lending institution. The good news is that mortgages in Dubai are well established, with a wide number of international and local lenders offering home loans to expats. Take a look at these 6 common mortgage mistakes to help ensure they don’t cost you the home of your dreams.
Learn to avoid these six common mortgage mistakes plus Laguna’s team tips for a successful application process.
1. Common mistake number one: Not checking your credit score.
The first place to start when thinking about a mortgage is checking your credit score. This plays a major role in determining the interest rate and terms of your mortgage. Check your credit score before applying for a mortgage and take steps to improve it if necessary. For example, lenders tend to reject applicants with poor or non-existent credit files. With this in mind, you should repair any outstanding issues in advance. If you’ve never had credit, you can consider taking out a credit card and paying it off in full each month to build up a credit history.
2. Common mistake number two: Failing to compare mortgage offers.
Don’t assume that the first offer you receive is automatically the best one. Shop around and compare interest rates, fees, and other terms from several lenders to find the best deal.
3. Common mistake number three: Making large purchases before closing.
Avoid making any large purchases, such as buying a car or taking out a loan, that could affect your debt-to-income ratio before closing on your mortgage.
4. Common mistake number four: Not being upfront about your financial situation.
Lenders need accurate information about your income, debts, and assets in order to approve your mortgage. Don’t exaggerate your income or hide any debts, as this can result in a denied mortgage or difficulty making future payments.
5. Common mistake number five: Not considering all costs.
Don’t just focus on the monthly payment when considering a mortgage. Take into account the down payment, closing costs, property taxes, insurance, and any other expenses that may affect your monthly budget.
6. Common mistake number six: Not reading the fine print.
Read and understand all the terms and conditions of your mortgage, including the interest rate, payment schedule, and any penalties for early repayment. Don’t sign any documents until you fully understand what you’re agreeing to.