Buying a home is one of the most significant financial milestones in anyone's life. It requires careful planning, disciplined saving and informed decision-making. Potential homebuyers need to adopt a strategic approach to ensure they are financially prepared for this investment.
To navigate the home-buying process, you must assess your financial health, set a realistic budget, save for a deposit and understand mortgage options.
This guide will help you plan your finances effectively and make informed decisions when buying a house.
Assess your financial health
Before you start searching for a property, take a deep dive into your financial situation. Understanding your income, expenses, debts and savings will give you a clear picture of your readiness for home ownership. Key factors to consider when assessing your financial health include:
- Income stability: Ensure you have a steady income source that supports home ownership.
- Debt-to-income ratio: Lenders typically prefer a DTI ratio of 36 per cent or lower, including your prospective mortgage payment.
- Savings: Having healthy savings will not only help with the deposit but also provide financial security in case of unexpected expenses.
Set a realistic budget
Start by creating a budget to track your monthly cash flow. This exercise will help you determine how much you can afford to spend on a home while maintaining a comfortable lifestyle.
Financial experts recommend that your monthly housing costs – including mortgage payments and home insurance – should not exceed 30 per cent to 35 per cent of your gross monthly income. To set a realistic budget:
- Use a mortgage calculator: Online mortgage calculators can help to estimate your monthly payments based on different loan amounts, interest rates and repayment terms.
- Consider future financial goals: Factor in other financial priorities such as retirement savings, children’s education and emergency funds.
- Account for lifestyle needs: Ensure you have enough disposable income to maintain your desired lifestyle while covering home ownership costs.
Save for a down payment
Traditional lenders typically require a 20 per cent deposit. To build this fund:
- Set up a dedicated savings account: Keep your deposit savings separate from your regular accounts to avoid spending it on other expenses.
- Automate monthly contributions: Schedule automatic transfers to your savings account to ensure consistent progress.
- Cut unnecessary expenses: Review your budget and identify areas where you can reduce spending to accelerate your savings.
Improve your credit score
Your credit score significantly affects the mortgage rates and loan terms for which you qualify. A higher credit score can help you secure a lower interest rate, saving you thousands over the life of your mortgage. To improve your credit score:
- Pay bills on time: Late payments negatively affect your credit score.
- Reduce outstanding debt: Lower your credit card balance and other debts to improve your credit utilisation ratio.
- Avoid opening new credit accounts: Applying for a number of new credit lines within a short period can lower your score.
- Check your credit report for errors: Regularly review your credit report and dispute any inaccuracies that could affect your score.
Research mortgage options
Understanding various types of mortgage can help you choose the best financing option for your needs. Two of the most common are:
- Fixed-rate mortgage: Offers a stable interest rate for the loan term, ideal for buyers who prefer predictable payments.
- Adjustable-rate mortgage: Features a lower initial rate that may increase after a set period, suitable for those planning to sell or refinance before the rate adjustment.
A mortgage pre-approval letter strengthens your position as a serious buyer and helps you understand your borrowing capacity. Pre-approval involves a lender reviewing your financial details and issuing a conditional commitment for a specific loan amount.
Plan for additional home ownership costs
Owning a home comes with ongoing expenses beyond the mortgage. It’s essential to factor in additional costs such as:
- Homeowners’ insurance: Protects your home from potential damages and liabilities.
- Maintenance and repairs: Experts recommend setting aside at least 1 per cent of the home’s value annually for upkeep.
- Homeowners’ association fees: If your property is within a community with shared amenities, you may be required to pay these charges.
Build an emergency fund
Unexpected expenses can arise at any time, making an emergency fund essential for homeowners. Having a financial cushion can prevent you from relying on credit cards or loans during emergencies. Aim to save three to six months’ worth of living expenses to cover unforeseen costs such as major home repairs involving plumbing, roofing, or heating, ventilation and air-conditioning issues.
Umar Bin Farooq is founder and chief executive of One Broker Group
My Own Home: Family buys Dh3.4m Sustainable City house and golf buggy for no-car community
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
UAE currency: the story behind the money in your pockets
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
UAE currency: the story behind the money in your pockets
Results
5pm: Maiden (PA) Dh80,000 (Turf) 1,000mm, Winners: Mumayaza, Fabrice Veron (jockey), Eric Lemartinel (trainer)
5.30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m, Winners: Sharkh, Pat Cosgrave, Helal Al Alawi
6pm: The President’s Cup Prep - Conditions (PA) Dh100,000 (T) 2,200m, Winner: Somoud, Richard Mullen, Jean de Roualle
6.30pm: Handicap (PA) Dh90,000 (T) 1,600m, Winner: Harrab, Ryan Curatolo, Jean de Roualle
7pm: Abu Dhabi Equestrian Gold Cup - Prestige (PA) Dh125,000 (T) 1,600m, Winner: Hameem, Adrie de Vries, Abdallah Al Hammadi
7.30pm: Al Ruwais – Group 3 (PA) Dh300,000 (T) 1,200m, Winner: AF Alwajel, Tadhg O’Shea, Ernst Oertel
8pm: Maiden (TB) Dh80,000 (T) 1,400m, Winner: Nibras Passion, Bernardo Pinheiro, Ismail Mohammed
Killing of Qassem Suleimani
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Russia's Muslim Heartlands
Dominic Rubin, Oxford
Monster
Directed by: Anthony Mandler
Starring: Kelvin Harrison Jr., John David Washington
3/5
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Monster Hunter: World
Capcom
PlayStation 4, Xbox One
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Marital status: Single
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
The biog
Favourite Quote: “Real victories are those that protect human life, not those that result from its destruction emerge from its ashes,” by The late king Hussain of Jordan.
Favourite Hobby: Writing and cooking
Favourite Book: The Prophet by Gibran Khalil Gibran
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The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
Torque: 315Nm @ 2,000rpm
Fuel economy, combined: 7.0L / 100km
LIKELY TEAMS
South Africa
Faf du Plessis (captain), Dean Elgar, Aiden Markram, Hashim Amla, AB de Villiers, Quinton de Kock (wkt), Vernon Philander, Keshav Maharaj, Kagiso Rabada, Morne Morkel, Lungi Ngidi.
India (from)
Virat Kohli (captain), Murali Vijay, Lokesh Rahul, Cheteshwar Pujara, Rohit Sharma, Ajinkya Rahane, Hardik Pandya, Dinesh Karthik (wkt), Ravichandran Ashwin, Bhuvneshwar Kumar, Ishant Sharma, Mohammad Shami, Jasprit Bumrah.
MATCH INFO
Jersey 147 (20 overs)
UAE 112 (19.2 overs)
Jersey win by 35 runs
The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
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SPECS
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
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Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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De De Pyaar De
Produced: Luv Films, YRF Films
Directed: Akiv Ali
Cast: Ajay Devgn, Tabu, Rakul Preet Singh, Jimmy Sheirgill, Jaaved Jaffrey
Rating: 3.5/5 stars
