Buying a first home is like a dream come true to anyone who wishes to own a house. Wishing to buy a house is one thing while planning to afford and build it is a totally different thing altogether.
Here are the few ways that help you afford your first home in UAE
Know how much you can really afford
Before taking that first step in buying your first home, make sure that you can really go for the plan and afford it considering your income, expenses and your long-term plans. Also, make sure that you choose a house that fits your income and future goals.
The salary required to afford a new home in the UAE can be one of the main factors to consider while investing in a new home.
We can decide the affordability based on the class people belong to. Lower class people earn up to Dhs 2000-6000 a month, middle-class people earn up to Dh 7000-30000 per month and the upper-class people earn up to 35000-3,00,000.
Based on the salaries people earn, their cost of living can be estimated, and thereby their affordability to buy a new home or their first home in the UAE.
Save for your down payment
If you are up for buying your first home, one of the important things you have to consider is saving for your down payment. In the UAE, a down payment of 25% of the purchase price should be kept aside while purchasing your first home. If you are still not having a savings plan, immediately go for having one because it’s very essential to have savings for your down payment.
Checking and paying off the already existing debts you have
The debts and the bills we make with our credit and debit cards should be cleared beforehand while planning to have a home mortgage as high-interest debts stand as a burden while having the mortgage.
The debt installments increase the Debt Burden Ratio(DBR) and you will not be eligible for the home finance from the banks if the Debt Burden Ratio is more than 50% or to put it simply if more than half of your income is spent on paying the debts.
In addition to the amount you saved for your down payment, it is also necessary to have a precise budget that helps you in need while affording your first home. All the unnecessary expenses should be reduced or completely avoided to have a healthy budget that can even be used to pay the utility bills, maintenance costs after you acquire the ownership of the property.
Plan for your mortgage
A mortgage loan plays an important role in affording the first home. Plan for your mortgage in a well-defined way by contacting and approaching different lenders instead of sticking on to a single lender.
Also, as there are different types of mortgages available, go for a mortgage that suits you. If you want the smallest mortgage payment then go with a 30-year mortgage, if you can afford larger monthly payments, go for a 15-year mortgage. Just be sure that you know which mortgage best suits you.
Before opting for a particular mortgage in UAE, calculate the payments using Mortgage calculator Dubai.
By following the above-mentioned ways, you can save and make wise moves to afford the first home that you dream about.