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5 bedroom villa for sale in Sharjah

Sharjah water front City

4 Most Crucial Factors You Should Know Before Asking For Mortgage
If you have a 2, 3 or 5 bedroom villa for sale in Sharjah, it is easy because we, Ajmal Makan, is
here to guide you to get actual value of your property in the city. But, when you come to buy a
house, it is one of the most important decisions for you. Unfortunately, few of us have the
money to pay for it without having to go to a loan. Hence we must devote time and worry
about looking for the best option. Here, we are going to give you a brief summary of the 4 most
important things that you have to keep in mind when requesting your mortgage. They are not
all, but these are the ones that you should keep in mind:

1. How much money can I ask when hiring a mortgage

It may seem obvious, but it is the most important part. A few years ago, there was a belief that
you could enter a bank to ask for a mortgage and go out with the money for the house, the car,
the money for the reform and a bit for a trip to recover from the stress of the paperwork. Now,
due to the crisis, things are not like that and the banks are "less generous."

So the first thing to keep in mind is that the bank may grant you less credit than your
expectation.

To begin with, it is currently very difficult for the bank to offer more than 80% of the value of
the purchase or appraisal of the home (usually the smallest of them), so you should keep in
mind that if you do not have the remaining 20%, you may be homeless.

As always in this type of paperwork, everything is subject to negotiation and you may find some
entity that improves that capital, but you must take into account the cost or interests that it
may have for you.

To summarize: First and foremost, make numbers before you begin, analyze how much you can
contribute from your savings and consider your economic outlook for the coming years.

2. Interest rate and benchmark (and differential) of mortgages

One of the first concepts you should learn, interest rate. It is the percentage that you will have
to pay the bank to lend you the money.

As little economic or financial knowledge you have, you will know that interest rates are
currently quite low. It is good news in principle, because it means that it will "cost you less" to
ask the bank for money.
Here another important term comes into play, the differential.

Your bank establishes an official interest rate as the basis of the loan. It is the so-called
reference index. Currently, almost all these operations are referenced to the Euribor rates. It is
basically the price at which banks lend money. The problem is that if the bank gives you loan at
that "price", you would not earn anything, so introduce a differential, which is basically an
increase on that interest and that could be said to be "your rate".

Depending on how high or low that differential is, the interest you have to pay will be higher or
lower. This together with the price of the reference interest rate (which also goes up or down
depending on the economic situation) makes up the total price that your loan will cost you.

At present, it is normal for your interest rate to be low and your differential more or less high. If
you know people with mortgages before the crisis, you will surely see that their differentials are
much lower. This is because when they signed their mortgage loan, the reference interest rate
was much higher. This is important to know because if at any time you acquire a home and
allow you to subrogate yourself to the mortgage loan of the previous owner; it may be a good
decision.

But be careful, everything that glitters is not gold. Right now, fixed-rate mortgages have a
higher interest than variable rate mortgages, but hiring one ensures that you will always pay
the same. If in a few years the rates go up it can be more advantageous compared to a variable.

3. Accessory products changing the conditions of the mortgage loan

Another of the best known practices in mortgage loans is the inclusion of accessory services :
domicile payroll, receipts, contract cards or, as we will see a little later, life insurance that
guarantees the bank the payment of the mortgage .

As per the law, a bank cannot force you to contract any service as a condition to grant you the
mortgage loan, except for the fire insurance that is mandatory by law, so what they do is lower
the differential of your mortgage “by awarding you ”For the accessory products you hire.

In this case, it is important to make accounts because the differential reduction does not always
save you money.

This happens very often with life insurance. On many occasions the bank will require you to
take out a certain life insurance for a mortgage with which to guarantee the payment of the
same. The first thing you should know is that this insurance is not mandatory (although it is
highly recommended to avoid that, if the buyer dies, the debt passes to his heirs), but above all,
it is not mandatory to contract it with the bank. In many cases, as we explain in the article on
how life insurance works linked to the mortgage works, you can save a lot of money if you are
looking for another mortgage life insurance option even if your loan conditions worsen.

4. In case of doubt about your mortgage loan, ask for explanations

The most important thing: if in doubt, find out. You should not be in a hurry to sign your
mortgage, no matter how much you want to buy your house or because you think you are given
financial issues. You will probably spend a lot of time with that loan, so it is important not to
leave any loose ends.

Your bank manager should answer you and give you the information and, currently, there are
many associations or websites where to collect information.

Also do not forget that you can ask the notary before signing (preferably not the same day to be
able to inform you without pressure) and that the bank cannot force you to choose one in
particular.

We hope this guide will help you buy a house in your favorite area like Sharjah water front city
where Ajmal Makan is currently focuses. If you have a mind to invest in or buy a villa in Sharjah
water front city, contact us!