Increase your Borrowing Capacity

  • 07NOV
Most homebuyers struggle in saving their initial deposit when buying a home. Did you know that you can increase your lending capacity to perhaps buy a bigger property or in buy in a better location ?
There are mortgage packages and products available that allow you to add up to 3% of the DLD fee and 1.5% of agent fees to the mortgage which reduces considerably your up front initial costs but more importantly increases your buying power by 18%. 
Here is a working example of an available deposit of AED800K cash buying a property with a value of AED2.5M.
Purchase price   AED 2,500,000
Down payment needed 25% AED 625,000
DLD fee 4% AED 100,000
Agent fee 2% AED 50,000
DLD fees (Miscellaneous)   AED 9,568
Valuation fee (approx.)   AED 3,150
Total Cash Required   AED 787,718
However, with the same deposit available, if you add 4.5% of the fees to your mortgage you can increase your purchase price to AED 2.95M. This is shown in the below workings.
Purchase price   AED 2,950,000
Down payment 25% AED 737,500
DLD fee 1% AED 29,500
Agent fee 0.50% AED 14,750
DLD fees (Miscellaneous)   AED 9,568
Valuation fee (approx.)   AED 3,150
Total   AED 794,468
This has increased your buying power by 18% and reduced the need for cash for the outlay of those initial costs associated with buying. By increasing the budget of your dream home by AED450K would enable you to potentially stretch that bit further and really afford the house of your dreams.
If you want to know more about these mortgage products and how they can work for you - please call Exclusive Links and we will immediately pass you through to our Mortgage Partners. 

Written by Zarah Evans, Managing Partner, Exclusive Links Real Estate

7th November 2019