Nothing can beat the excitement that first-time house buying experience brings with itself. The thought of turning your dream of owning a home in beautiful city of gold (Dubai) is definitely a pleasurable one. However, all this excitement can turn into anxiety and stress if things do not go as planned.
With the development of new projects, there are plenty of options now for people looking for homes and apartments for sale in Dubai. However, before you start your hunt for the perfect home, here are some important things you must do before your first home in this city:
Organize your Budget and Finances
Needless to say, this is the first thing you should do when planning to buy a home. Whether it is your first time buying or any subsequent purchase, this step forms the basis of purchasing any property, not only in Dubai but anywhere in the world.
Having said this, first-time buyers often falter in this regard due to a lack of experience. They merely consider the actual price of the property without accounting for other expenses such as government fees, broker fees, and bank charges, etc. These expenses can overwhelm your finances. Furthermore, it is important to consider your current earning potential along with long-term financial commitments. These factors determine how much you can afford to buy your first home.
Manage your Down Payment
Those who are interested in buying a home on a mortgage, it is important for them to manage funds for their down payment in advance. People belonging to other countries need to pay at least 25% of the complete value of the property as a down payment. So, the sooner you start saving up for the down payment, the better it will be for you.
Clear all your Existing Debts
Before taking the decision of becoming a homeowner in Dubai, make sure you have cleared all your existing debts. Whether it is a student loan, credit card debt or personal loan, try and clear all of them. This will help you to organize and streamline your budget properly.
If you have taken high-interest loans, you will find it difficult to qualify for a mortgage. As your DBR (debt burden ratio) will be on the higher side, banks will hesitate to grant you home finances. To smoothen the process, get a mortgage pre-approval. You can get this by submitting certain documents to a bank that is going to verify your eligibility for house finance. Getting a mortgage pre-approval is also necessary as, without this, real estate brokers may not show you properties for sale in Dubai.
Go Through a Complete Verification Process
This one is extremely important, particularly for first-time buyers. You need to verify if the seller owns the property and it is not a scam or fraud. Make sure they have the authority to legally sell it. Ask for the property deed for this purpose. Other than that, verify that there aren’t pending debts on the said property. It must be free from debts such as tenancy rights, mortgage, lien, etc. You can check the NOC in this regard.
Another thing you need to verify is that the real estate broker you are dealing with is registered with DLD (Dubai Land Department) through the RERA (Real Estate Regulation Authority). They must have a valid broker ID as well.
Register with DLD
This step is applicable if you want to buy a freehold property. With freehold property, you will not only become the owner of the home but own the land on which it is constructed as well. Furthermore, there are numerous other benefits of becoming a freeholder. Buying such a property requires the owner to be registered with DLD.
It is important to note there are some regulations to follow when it comes to becoming a freeholder. Buyers belonging to certain countries are allowed to purchase properties in Dubai only in selected areas.
Reassess Your Budget
Although we have talked about organizing the budget at the start, but here we are stressing over the fact that you will need to reassess your budget after you have purchased a home. As a major part of your savings is going to be used as the down payment, you will not have enough money to fall back on. So, it becomes quite crucial to organize your existing monetary resources. The ideal approach here is to create a new budget and keep aside the money you will have to pay as regular mortgage installments. Moreover, also allocate a chunk of your budget for other routine expenses such as utility bills, maintenance costs, etc.
Home buying in Dubai can prove to be an overwhelming process, particularly for first-time buyers. This is a huge decision and requires a lot of planning. Hence, do not feel hesitation if you need any sort of help. Experts at Zoom Property are always available for your assistance.