Finding and negotiating the purchase of a property in Dubai is a daunting task. Getting a good deal on a home and agreeing terms with a seller has become so difficult that it is understandable for buyers to want to rush through the mortgage application process. However, there are several common missteps you should avoid so that you do not miss out on a deal because your home finance application is delayed, or even cancelled.
Not Getting a Pre-approval
Yes, getting a mortgage preapproval will cost you money (starting from AED 500 to AED 2,000 or more). However, the cost is minimal when compared to the actual price of a home, not to mention the fact that it is usually valid for a month or more. In addition, some buyers will only deal with sellers that have a preapproved home loan; so the chances of having your offer accepted are much higher.
With a pre-approval, the bank has already gone through the application process, and qualified you for a certain loan amount based on your profile and financial history. So not only will you know what home price you can afford, but you can also focus on finding a good deal and not have to worry about missing out because the bank delayed the review of your application, or even worse, rejected it.
Leaving Parts of the Application Blank
In general, you should never sign an application that is partially blank. When it comes to a home loan, it can be difficult to predict how long your bank in the UAE will take to respond to your application. Leaving sections blank may hold up the process significantly, as communication between an applicant and lender tends to take time.
Lying or Misinforming the Bank
Lying or providing inaccurate information (whether done purposely or by mistake) is never a good idea. A home loan is a big-ticket item for any UAE bank, and they will spend the time to validate the information you provide them. With the Al Etihad Credit Bureau’s reports, UAE banks now have an easy way of checking your existing debts and credit history. So if you’ve ever been late on payments, you should disclose this. Obviously, your application will get rejected if you have provided incorrect information, but the bank may even go a step further and put you on their black-list, meaning you can never use any of their banking facilities in the future.
Review the Terms & Conditions
You should read all the fineprint about the product you are applying for beforehand. Otherwise, you may realize at a late stage that you have been approved for a home loan that it is not in your best interest to take. That means all your effort and time was wasted, and you have to scramble to find another financing option.