This post highlights potential mortgage mistakes first time home buyers should avoid.
You don’t buy a home every day. It is a critically important decision that requires a strategy to perfection.
But, a first-time home buyer is more likely to make a few mistakes. Most mistakes happen when you decide to select a mortgage for your first house.
It is a common concept that we learn from our own mistakes. However, your house mortgage is not something you can afford to make a mistake with.
Related : Check Mortgage rates in UAE
Five First-time Home-Buying Mistakes to Avoid
- Not knowing multiple loan options
The biggest mistake you can make it not investing your time and effort in mortgage product research.
There are various options provided by the banks in the UAE for mortgage loans. Each comes with their specific benefits and features. But if you stay unaware of those features, mistakes happen.
People tend to ask a family member or their realtor and make their decision. You can’t afford to make an uninformed decision.
Thanks to online comparison sites for financial products, you can conduct comprehensive research in advance.
This way, you can find an exact match of mortgage for your needs.
Related : Compare Mortgages in UAE
2. Forgetting about a credit score analysis and pre-approvals
According to many people, finding a mortgage can take more effort than searching a property in the UAE.
There is a whole list of factors that go under evaluation before you get loan approval.
Banks, generally, look into your monthly income, credit score, and other factors to decide the loan amount you can acquire.
You can use Mortgage Calculator to determine your monthly finance repayments as well as the additional fees which is required to buy property and take mortgage in UAE.
This is the reason why you have to understand all the required pre-approval information. Then, get your credit score analysed before applying for a mortgage.
3. Applying for a too big of a mortgage
Banks are ready to offer the maximum mortgage amount, for which, you qualify. But, do you actually need that maximum amount?! This is the question smart home buyers ask in order to avoid a big mistake.
Big mortgage means a longer repayment period, which can impact your life in a big way. You need to think about the future plans and necessary phases of your life.
While banks evaluate the maximum amount of mortgage you can get. You should evaluate the minimum mortgage amount required.
Sit with your financial adviser to understand your daily, monthly and annual budget. Then, use the conclusions to align with the repayment method of a mortgage.
4. Not looking at house acquisition additional expenses
When buying a new house, you don’t just pay the asked price for the selected property. The acquisition process includes several additional costs.
Generally, you have to spend money as a valuation fee, land department fee, property registration fee, mortgage registration fee, processing fee for the mortgage and others.
These additional expenses can boost your payable amount up to 31 percent.
No need to say, you can’t afford to ignore these expenses. Otherwise, it will delay the mortgage acquisition and restrict you from getting your home.
5. Ignoring the annual home maintenance cost
When selecting your mortgage, you can’t only focus on the payment you give back for that mortgage. You are buying a house, which also puts pressure on your financial state.
If it is a big house, you will be spending money every year for its maintenance. Repair and other costs are factors that people forget when looking at their mortgage payments. You shouldn’t make this mistake.
Why make mistakes when you can prepare to perfection! You can strategize your mortgage for a new house by avoiding the mistakes mentioned above.
Do this and you will find yourself relaxing in your dream home soon. That too, without worrying stressing over the mortgage you have acquired.
Suggested Article : Dubai Mortgage for Non Residents in UAE