I am looking to buy some property for investment. Should I speak to a mortgage expert before starting my house hunting?

 
Certainly, it’s extremely important to consult the mortgage professional first, if you target to support the purchase with bank funding and understand how much you can borrow. To do your eligibility check, the bank will consider your income and debts, employment and residence status, along with the available funds for the down payment and other required reserves. And once, the case is approved the bank will determine the loan amount based on your affordability for the monthly mortgage payment and the pre-approval letter will be handed with the loan terms and condition details.

 
Once the pre-approval letter is offered to the buyer, he/she can assuredly negotiate the deal with the seller and can discuss favorable buying condition without any delay. This small exercise of evaluating your eligibility beforehand saves time and helps to fasten the buying process with assurance. The pre-approval process takes 3-5 working days’ time depending on the institutions. Henceforth, speak to the mortgage expert and prudently identify your eligibility before exploring the home options.

 
I have a townhouse which is currently rented. Now I am scheduling to invest in another property, how much equity I can acquire from my current house. And can you advise how I can do so, what is the process and how to keep a check on my cost?

 
Well, how much equity you can actually gain, this is mainly considered based on the current property value, and as per the property evaluation amount the bank determines the Loan to Value (LTV).

 
The process of refinancing is simple and forthright. And if the required documents are as per the bank procedures, then the process needs around two to three weeks’ time, to evaluate and provide the Final Offer Letter (FOL). To start with, the banks will need homeowner’s bank statements, identity proof documents, property documents and current debt details, along with the added income papers.

 
Besides, do some math to avoid extra refinancing costs to your pocket and figure out options wisely to have enough savings. To decide on the best and low-cost mortgage refinance, study competitive deals in the market, look into the product offering and on top of everything, calculate the in-between cost to save extra.

 
Can you explain Debt Burden Ratio (DBR) and its Importance while taking a loan in the UAE?

 
Debt Burden Ration (DBR) is basically a percentage of your debt against the income. In UAE when you apply for a loan, one important fact every financial institution’s review is borrower’s debt-to-burden ratio. To protect the UAE economy, the Central Bank introduced certain measures, wherein the standard maximum DBR ratio for anyone in the country, cannot overdo more than 50 percent of yearly income. Also, the maximum amount that could be funded to UAE nationals is agreed at eight times of annual income and for expats seven times of their annual income. Hence, this ratio directly impacts the aptitude to acquire the loan and provides an upright indication to banks about the ability of the borrower to service the loan repayment. If your monthly income is AED 20,000, so, as per the bank your monthly debt repayment aptitude should be within AED 10,000, it cannot be more than this. To calculate the DBR and how much finance one will be entitled to, the bank will look into all the income-related documents, credit card limit and details of any debt cycle, the borrower is enduring at present.