Don’t Fall For These Mortgage Myths! Insider Tips On Dubai’s Mortgage Market – Allsopp & Allsopp

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On this week’s episode of Taking Care of Business, join CEO, Carl Allsopp alongside Mortgage Specialist; Connor Humble to dive into the world of mortgages.

Uncover how to effortlessly obtain your first mortgage, why the current interest rates will shock you, and bust some popular mortgage myths!


Buy/sell, rent/lease residential &
commercials real estate properties.

Navigating the Dubai mortgage market

Diving right in, Connor and Carl speak on how the Dubai real estate market continues to thrive, how a majority of buyers in the market in Q1 2024 opted for a mortgage, and discussed the different possibilities of buyers securing a mortgage that can work for both residents and foreign buyers.

Carl and Connor then shed some light on the current landscape of mortgages in Dubai compared to the UK, and how down payments, interest rates, and mortgage strategies can be far more expensive for first-time buyers if they aren’t prepared beforehand with pre-approvals.

Dubai vs. UK – Comparing mortgage markets

When comparing, Carl asks Connor about the major differences between the mortgage markets in Dubai and in the UK.

Connor shares how in the UK, a diverse range of banks each have their own unique lending criteria. This variety offers borrowers multiple options to look at but can also be overwhelming. However, Dubai’s mortgage market is characterised by fewer banks with more standardised criteria, such as in Dubai including interest rates, processing fees, and survey costs, which can be more expensive for buyers. And for self-employed individuals, it is more challenging to secure favourable rates.

Typically, only 20-25 banks are actively offering mortgages in Dubai, which is a contrast to the UK’s more saturated market. Although, despite all of this, buying in Dubai is more affordable and it is far easier to obtain a mortgage than when compared to the UK.

Here are some key differences between both markets:

  • In Dubai, the size of your down payment does not influence the interest rate you receive, unlike in the UK.

  • Residents generally need to provide a 20% down payment, while Emiratis can secure a mortgage with a 15% down payment.

  • Additionally, there are financing options available for Dubai Land Department (DLD) fees, which are the same as stamp duty in the UK.

Comparing fixed rates vs. variable rate mortgages

Carl asks Connor about his recommendations on whether buyers should opt for a fixed-rate mortgage or variable-rate mortgage, and why.

Conor recommends buyers opting for fixed rates in the current market. Fixed rates are currently lower, around 4.4%, compared to variable rates, which usually hover between 6% and 6.5%. He says a notable benefit of fixed rates is the option to refinance if rates drop during the fixed term, and this is usually set for three years.

He suggests that clients should prioritise lower interest rates and be mindful of banks as the processing times can vary. He encourages buyers to work with a professional mortgage team that can streamline paperwork and negotiations, ensuring a smoother process and better deals for buyers!

Is a perfect credit score important to obtain a mortgage?

A perfect credit score is not a necessity – Connor explains how banks use a different approach to evaluate borrowers, focusing on the rationale behind their credit history.

New residents in Dubai might find it easier to secure a mortgage compared to those with a history of missed payments, other factors affecting credit scores include loan repayments, bounced checks, and the number of credit inquiries.

Connor also adds how having high credit limits can negatively impact mortgage eligibility, as banks view it as a potential liability. But this isn’t the case for everyone.

Buying vs. renting: Which is better?

Carl asks Connor if he suggests clients buy or rent, and which one he thinks is the best option in the current property market. Conor suggests buying over renting to build personal wealth.

He shares that while there are specific scenarios where renting might be preferable, such as living in high-demand hotspots, owning property generally offers greater financial benefits.

Debunking mortgage myths

Carl concludes by asking Connor several common questions and misconceptions surrounding the mortgage process!

To continue listening, tune into Taking Care of Business, every Friday.

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