It is important to evaluate the variable rate before selecting your Home Loan.

When financing your home, it's tempting to go with the lowest possible interest rate. However, most advertised rates are fixed for a short introductory period. Evaluating the variable rate which includes both the base rate and margin after the fixed introductory period can help you make a balanced decision. Your financial evaluation and property selection should be based on a variable rate rather than the lowest fixed rate offered for a short introductory period. This will help you to take the right decision in the long run.

A higher down payment on your home now means lower total payments on your home.

Loan to value (LTV) is a financial term used by lenders to express the ratio of a loan against the value of the home. While it's tempting to apply for the highest LTV, it is advisable to pay a higher down payment and opt for a lower LTV. This helps to ensure that future payments are manageable and also helps you keep more disposable income and save up money for other unforeseen and unavoidable circumstances. It also gives you flexibility to move for a better offer or pricing in case another bank is offering lower rates than your current home loan.

What you buy is important. Where you buy is even more so. That's why the first rule of real estate is: location, location and location. Carefully consider things like the developer, the neighbourhood and the distance to amenities like shops, schools and parks. These factors will not only help you live more comfortably, but will have a big effect on your property's sale and rental values in the future.

A shorter tenor will result in less overall interest paid. When buying your home, don't stretch your financial commitment unnecessarily by extending the period of your mortgage. Although you will reduce your instalments which makes you eligible for a higher loan, you will end up paying more interest overall, making your home more expensive to own in the long term.

Example: Villa price: 2.5 M
Mortgage (80%): 2 M
Down payment (20%): 0.5 M
Interest rate: 4.5%

As you can see in above table, compared to a 25-year tenor, a 20-year home loan is 29% cheaper and 15-year home loan is 77% cheaper on overall interest paid basis. For more practical advice on buying a home, get in touch with us.

An MOU must be a comprehensive document outlining clear obligations of the buyer and seller. The document must be explicit and clear with regards to the fee payable to the real estate broker, government institutions, developer and lender respectively. It is suggested that the MOU outlines a reasonable time frame to complete the transaction, especially when the seller has a mortgage and the buyer is also completing the transaction through financing. The MOU must protect the buyer in the event of the valuation amount falling short of the agreed sale price or mortgage approvals not coming through for any reasons. The MOU must ensure the buyer is protected against any former legal disputes or claims made by the competent authorities or the developer which could halt the transaction. Particularly for rented properties, an MOU should highlight clear and transparent actions with regard to the possession and the future tenancy terms.

When buying a property, you need to have a clear picture of expenses which are payable by the buyer. Broadly such expenses can be classified as Bank, Developer, Dubai Lands Department and Real Estate brokerage charges. Buying a property through mortgage financing requires a minimum of 10% cash equivalent to the property value to be set aside for these costs. They can vary but the following is an example:

An independent valuation of the property is mandatory by the bank’s valuators. The finance amount is calculated by the lender based on the valuation provided by the valuator. In some cases, valuation can be lower than the sale price which essentially means less financing and a higher down payment being needed. In order to avoid such a situation; you must include an exit clause in the MOU to mitigate the risk which could also protect you as the buyer from losing your initial deposit if you fall short of the expected financing amount. The market value of a property ascertained by the valuators excludes transfer and brokerage fees, furniture and other removable items.

• Original Emirates ID and Emirates ID copy
• Valid Passport Copy with valid Resident Visa page (Old Passport copy if Visa is stamped on old Passport)

• Latest Salary certificate addressed to Emirates NBD
• Latest Pay slips (in case of more than 10% variance in Salary)
• Previous employment proof if less than 3 years
• Latest 6 Months Bank statement

• Valid Trade License copy
• Plus MOA (Memorandum of Association) including all amendments
• Latest 6 Months Bank statement
• Latest 2 years audited financial

• Co-borrower's valid Passport and visa page
• Income documents (if applicable)
• If Co-borrower is a company, then MOA & TL to be obtained. Passport Copy of partners also to be obtained

In the first meeting your RM will try and understand you as an individual to better appreciate your attributes and aspirations. To suggest an appropriate banking solution to you, your RM may enquire about your hobbies, interests, investment risk profile, financial goals and timelines to achieve these objectives in future.

Our Home Loans are open to new and existing customers of all nationalities.

You need to provide us with the following documents:

• Identification
  
  • Original Emirates ID and Emirates ID
  • Valid Passport Copy with Resident Visa page
• Salaried Individuals
  • Latest Salary certificate addressed to Emirates NBD
  • Latest Pay slips (in case of more than 10% variance in Salary)
  • Previous employment details if less than 3 years
  • Latest 6 months bank statements
• Self-Employed Individuals
  • Valid Trade License copy
  • MOA (Memorandum of Association) including all amendments
  • Latest 6 months bank statements (company and individual)
  • Latest 2 years audited financials
• Co-borrowers documents (if applicable)
  • Co-borrower's valid Passport and Resident Visa page
  • Income documents (as per salaried/self-employed requirement)