Securing a mortgage in the UAE with bad credit score is challenging
Do you have a poor credit payment history? Have you ever been declared bankrupt? If your answer is yes let me tell you that there is no denying the fact that you have bad credit score. This score might not bother you now but think for a while about its seriousness. Won’t it deteriorate your credit worthiness affecting future borrowings? Obviously, it will.
The UAE has always remained the most hot real estate investment spot for foreigners. With current prices of properties in Dubai and the UAE touching bottom level so it is the best time to invest in Dubai for foreigners as it is nothing less than a paradise. Though, the UAE banks have slashed mortgage rates to facilitate buyers and kick-start recovery in the market yet the lending criteria of banks is still stringent. This is because banks do not want to go on building a portfolio of non-performing loans, which was once the root factor of Dubai real estate collapse.
Banks in the UAE are currently selective in mortgage lending. If you have a poor credit profile, securing a mortgage in the UAE can be quite challenging for you. However, there are still a large number of banks in the UAE, which can offer you mortgages if you have a stable source of income and are ready to meet your financial obligations on time from now onwards. To get yourself approved despite the stigma of bad credit history is challenging but not impossible. All you need to do is to be careful and show some sense of responsibility.
Improve your credit profile
Just like DNA gives you a physical identity, credit report gives you a financial indentify. Before securing any mortgage, always analyse and evaluate your credit score to know how bad your credit worthiness is. Mostly, if your credit score is above 620, you can secure a mortgage with certain terms and conditions. However, if your score is quite lower than that, you must plan to improve it before asking for a mortgage.
You can improve your credit score by making some of your accounts current and paying your credit cards bills and other loans on time. You can allocate greater amount to repay your other loans from your monthly budget to show small outstanding loan amounts in the report. If you have secured a revolving credit, try to keep it at the lowest percentage and strictly decide to pay as much credit as you can on time.
Select right mortgage product
Mostly banks in Dubai, in order to lower their risk, charge higher rate of interests on bad credit loans as compared to other loans. Some banks require you to pay bigger amounts resulting in early retirement of debt. Beware of the fact that though you will be required to pay more interest rate on mortgage yet this interest rate varies with your credit score. You must identify your credit score and then decide under which bracket of interest rate you fall.
This is because many banks often charge very high interest rates on bad credit loans in spite of your decent credit score. Decide a bank and then check out all of its mortgage products to know which one suits you the best. Even if your credit score is poor, try to improve it so that you may pay moderately higher interest rate than a mortgage meant for people who have good credit worthiness.
