Buying your first home is a big milestone for anyone, and in a city like Dubai, it is crucial to be well-prepared. The process can be really challenging, especially if you are not familiar with the real estate market. There are so many important factors to consider to complete the buying process smoothly. Even though you think you are ready to buy a house, you might not have any idea where to begin. So, we have assembled 5 essential tips for first-time home buyers that will help them navigate the process from start to finish.
Start Saving Money
One key point to consider when you are thinking of owning a property is to start saving money. When you are applying for a mortgage to buy a home, there are several reasons you will need your savings. You have to pay the down payment, which depends on the type of mortgage you are applying for. The down payment of the property can range between 10% to 20% of the total price of the house.
You should also consider the closing costs involved in the buying process. Most first-time home buyers often overlook these costs during the purchase process, which can create financial problems. The closing costs involved in the property-buying process include government fees, agency fees, Mortgage fees, Initial deposits, and Insurance fees. When you have savings in your account, you can easily handle different circumstances that may arise during the purchasing process without disturbing your finances.
Check and Fix Your Credit Score
Your credit report plays a big part in your mortgage loan application. Your credit score will determine whether you are qualified to get the mortgage and your loan’s interest rate. If you have a higher credit, it will help you get a mortgage at a lower interest rate. So, you have to take steps to improve your credit before applying for a mortgage to buy a house. Here’s what you can do to improve your score.
- Do not close your credit cards, as doing so will increase the portion of your available credit, which results in lower credit scores. So, you have to keep your credit cards open.
- Pay your credit card bills on time and keep your balance as low as possible.
- Keep track of your credit score every week so that you can take action on time if necessary. You can ask your bank for your credit reports.
- Do not open new credit accounts when you are applying for a mortgage. This will result in an inquiry on your credit report. It reduces the overall age of your credit accounts and hurts your credit score.
Decide Your Budget
Before you start hunting for a property to buy in Dubai, you must take a step back and decide on your budget. The price range you set must be realistic after considering your financial condition, such as your savings, income, or any other outstanding debt. When you understand your affordability, you will create a budget that includes all costs associated with property purchase, such as down payment, legal fees, registration fees, and taxes. You can ask your financial advisor or mortgage specialist to examine your financial capability and financing choices.
Most first-time buyers think they only have to pay monthly mortgage payments. This is only true when you are living on a rental property and paying monthly rent and utilities bills. However, you have more financial responsibilities as a homeowner, including additional costs and monthly mortgage payments. Some additional costs that you should consider are
Shop Around for Mortgage Lenders
When buying a home through a mortgage, explore different options and compare multiple quotes. Doing this will help you save thousands of Dirhams in interest over the lifetime of the mortgage. You can request the same type of mortgage from different financing companies and compare the costs, such as possible orientation fees and interest rates.
Hire a Real Estate Agent
Going through the home-buying process, especially for first-time buyers, can be tough. For a seamless buying experience, it is good to use the services of professional real estate agents. An experienced agent can give you useful advice and information, help you find the perfect location and suitable houses within your budget, negotiate with the seller on your behalf, and handle all the legal matters and paperwork involved during the buying process. A skilled real estate agent has a good understanding of Dubai’s real estate market, which can save your efforts, time, and potential risks. It will be best to hire a licensed and trustworthy agent who knows your preferences and needs.
Buying a home as a first-time buyer in Dubai can be stressful and exhausting. But if you follow these tips and use our services as a reliable real estate agency in the home-buying process, you can make your dream of owning a home in Dubai come true. So contact us today and start your journey towards becoming a homeowner in Dubai.
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