In Dubai, securing a home loan is a major financial decision, and it’s no longer restricted to salaried individuals or business owners. A housewife also can apply for a home loan in Dubai if she meets all the criteria set. Here we learn how housewives can successfully apply for home loans, what factors banks consider, and the steps involved in getting home loans in Dubai to increase their chances.
Understanding Home Loans in Dubai
Over the past few years, Dubai’s real estate market has picked up, and many people from all walks of life have observed it. Several home loans are now being offered by financial institutions in the UAE and these apply to many types of customers, even non-salaried, such as housewives. However, being a housewife carries some disadvantages mainly associated with a lack of regular income. But then, there are ways and solutions to dealing with these issues also.
Challenges for Housewives in Securing a Home Loan
An individual’s financial stability is one of the most significant criteria that banks are considering to sanction a home loan. Since most housewives do not have a regular salary, the process becomes a little complicated. Banks look for proof of income to ensure that the applicant possesses the capacity to reimburse the loan. Housewives may find this eligibility challenging to fulfill because that is rather too simple on the part of those who earn a salary or have business operations.
Drawbacks
There is no generation of salary; therefore, it becomes very difficult to prove one’s income repayment capabilities in home loans. A salaried woman may have very little credit history because she may not have had any previous loans or credit cards in her name. This can, at times, become weak enough to disallow credit access. Similarly, the banks believe that a salaried individual is a higher-risk client, and hence he will get loans at higher rates. Very few choices are available as collateral. If the housewife does not have an important asset or property that the bank can use as a source of collateral, the bank might be very reluctant to approve the home loan.
Solutions for Housewives Seeking Home Loans in Dubai
Of course, there is a good chance that the housewife will be able to succeed in obtaining a home loan in Dubai if she follows one of the following:
Joint Loan Application
Perhaps the best option for a housewife while seeking a home loan for a house is to apply jointly with a working spouse. Most of the banks in Dubai permit joint home loans, wherein two incomes are considered while determining eligibility. This might make up for the housewife’s missing out on direct income on her own account. With a combination of the husband’s income with the wife’s, the overall loan amount might also increase.
Documentary Evidence of other Sources of Income
Wives who have valid sources of supplemental incomes such as rental properties, freelancing, or investment may well be a cushion in enhancing their housing loan applications. Bankers are known to accept any stable source of income that would prove the ability of the loan applicant to repay the loan in due time. For instance, documentation of these sources of incomes dramatically increases the chances of approval for the loan.
A Good Sufficient Down Payment
Generally, banks in Dubai ask for at least 20% of the property value to be paid as down payment by expatriates and 15% if the person is a UAE national. Again, however, the offer of a higher down payment will reduce the loan amount that needs to be granted, thereby reducing the bank’s risk. This might even lead to a better interest rate on the home loan as a result of a higher down payment, and thus easier on the purse in the long run.
Good Credit Score
Even a homemaker will not have a fixed source of income and yet maintaining a good credit score is very important for home loan since the bank scores all applicants, including co-applicants for determination of timely repayments or otherwise. For example, paying credit cards or bills, or any other form of financial liability on time, is an important factor in a person’s good history of personal finance management. This would substantially influence the decision about whether to approve or decline a home loan for a person. The housewife needs to achieve or maintain an excellent credit score in order to enhance her creditworthiness before seeking a home loan.
Collateral or Guarantor
In other cases, having collateral or a guarantor can weigh in favor of the situation where an applicant housewife cannot satisfy the income requirements. In some banks, valuable assets such as houses or investments are accepted as collateral against the loan while having a guarantor who will assume responsibility for paying the loan if the applicant is unable to pay. The bank will focus more on the income and creditworthiness of the guarantor.
Self-Employed Housewives
In most cases, if the housewives run a small enterprise, like online shops or even private tutors, then they will be considered self-employed. Usually, Dubai banks, give home loans to self-employed people if they have sufficient proof of constant income for at least two or three years. To strengthen the case of the housewife being eligible for the home loan, tax returns, bank statements, or business records can be submitted as proof of income.
Bank Policies and Eligibility Criteria
Home loan policies and eligibility criteria vary from one bank in Dubai to another. So a housewife may have different experiences with the bank she approaches. Common things they consider or insist on while considering home loan eligibility are:
- The age at the time of applying for the loan is a minimum of 21 years.
- The maximum age up to which a person can attain when the loan matures.
- A good credit history typically with scores of 580 or above.
- Applicants should have an acceptable debt-to-income ratio, which is usually less than 50%.
Lenders will also focus on reviewing the applicant’s financial condition, including past loans and liabilities. The more you understand this basis, the more your loan application from a housewife will be prepared accordingly, and thus there’s a greater chance of approval.
Why Banks Are Willing to Lend to Housewives
Recent times have taught banks how to view the investment opportunity in a non-employed person. Today, as women increasingly pursue a business or property venture, the door of opportunity is ever wider for housewives as long as they present a stable financial entity. Besides, the real estate market in Dubai is rich with diverse segments of purchasers, and banks are interested in making homeownership accessible to a large population of citizens-including housewives. Moreover, the flexible loan options and assimilation of alternative income sources have made the conditions less stringent by Dubai banks for housewives who wish to avail of home loans. These are a manifestation of changes in attitudes about the role of women in financial decisions and property ownership.
Steps to Apply for a Home Loan in Dubai as a Housewife
If you are housewife then follow these steps for getting a home loan in Dubai:
Market Research
Understand the types of home loans available and compare offerings from different banks.
Mortgage Broker Consultation
Mortgage brokers will guide the housewife through the process and refer them to the best loan options for their peculiar situation.
Prepare Financial Documents
There is a strong likelihood that these are the grounds for getting your application approved. Collate together your supporting financial documents. These are documents showing income proof like rental agreements, investment statements, freelance work contracts, and so on.
Check Credit Score
Your credit score should be strong before applying.
Explore Joint Applications
If possible, consider applying with a spouse or family member to increase loan approval chances.
Conclusion
While being a housewife in Dubai, applying for a home loan may come with some hindrances, there are nevertheless solutions to apply to solve the problem at hand. There are ways joint applications, proof of alternative sources of income, and a good credit score can avail housewives of access to home loans while tapping into the growing property market in Dubai. It is merely about preparation, research, and savvy financial tool utilisation.