Pros and Cons of Using a Mortgage Broker in Dubai

Pros of using a mortgage broker in Dubai

Before answering the question many homebuyers often pose, “Should I use a mortgage broker?” let us first understand the pros of hiring one in Dubai:

You get access to a network of lenders 

Mortgage brokers in Dubai will have access to a wide network of banks and lenders. This can immensely help those unfamiliar with Dubai’s real estate and financial markets, as the mortgage broker will be able to identify the perfect lender to suit your circumstances.

Along with the network of lenders, a mortgage broker will be familiar with the criteria, procedures, and different types of mortgages each lender provides. This can help the borrower save a lot of time and energy that would otherwise be spent on research. With a mortgage broker, you will have direct access to various lenders - and can dive straight into securing the perfect mortgage for you.

You get real estate market experience and expertise 

One of the biggest pros of hiring a mortgage broker is their years of experience and expertise in the Dubai real estate market. Additionally, they consistently keep abreast of global and local trends that can impact the city’s real estate and financial markets. 

Based on their expertise, credible mortgage brokers can help you understand the market, guide you through the mortgage process, and help you select a mortgage that suits your needs. The first step for first-time homebuyers should always be having ample knowledge of Dubai’s mortgage and real estate dynamics - a mortgage broker can facilitate that. 

You save time and effort

Researching Dubai’s mortgage system, visiting various banks and lenders, understanding their plans and policies, and determining which one suits you - are all tasks to be accomplished if you want to find the best mortgage.

But of course, doing this can require lots of time and effort. With a mortgage broker, you have an expert facilitating the process and doing the research on your behalf. 

You secure the best interest rate

When buying a property, it can be tempting to go straight to the bank you use for daily banking to ask for a mortgage. Whilst this can be a quick option, there is a high chance that you won't be offered the best interest rate or most suitable terms.

A key reason you should use a mortgage broker is that they will both compare all major mortgage providers and potentially have access to exclusive offers, allowing you to get a property mortgage at lower interest rates and reduced fees than going to your regular bank.

This could save you many thousands of dirhams over the life of your mortgage, so bear this in mind when considering “Is it worth going through a mortgage broker?”.

You get impartial advice

Unlike a bank, whose primary incentive is to ensure you choose a mortgage with them, a mortgage advisor should work only on your behalf - to secure you the best mortgage. This impartiality is crucial to ensuring you get the right mortgage for your needs.

You get help with the paperwork and application

As with any significant transaction, applying for and securing a mortgage requires a certain amount of paperwork and administrative work to be completed. One of the pros of using a mortgage broker is that they can help ensure you have all the necessary documents and work with you to ensure all the required processes are followed, saving you time and potential stress.

You reduce uncertainty

When applying for a mortgage directly with a bank, there's no certainty that you will be accepted, even if you meet their eligibility criteria, like the required deposit. A mortgage broker will have a deeper understanding of the processes and criteria of each bank, allowing them to guide you on the suitable providers that will have the highest chance of approval. This could save you time and reduce uncertainty during the mortgage application process.

Cons of using a mortgage broker in Dubai

While there are many reasons to use a mortgage broker, this article will address the pros and cons of using a mortgage broker in Dubai. Knowing the potential cons of hiring a mortgage broker will give you more clarity and help you be mindful of any potential challenges you could face.

Limited control over your mortgage 

When considering “Should I use a mortgage broker?”, one factor to be aware of is that you will lose some control over the mortgage you get. While you will still have the final say on the mortgage provider, amount, etc., a mortgage broker will, to a certain extent, make the decisions on your behalf.

If you want complete control, this is something you should consider before proceeding with a mortgage broker. However, by finding an experienced, independent mortgage advisor that you can trust, you can be comfortable knowing that they are working on your behalf to get you the best mortgage - so giving up some control to them isn't a bad thing; it's a good thing.

Mortgage broker fees

A mortgage broker will usually charge a specific commission fee for their services. To answer the frequently asked question, “How much does a mortgage broker cost?”, their fees can often range anywhere between AED 2,000 to AED 5,000 -  this could be in the form of a percentage of the mortgage amount or a flat fee. This is an added expense when considering the cost of buying a property in Dubai.

When deciding whether you should use a mortgage advisor or whether the cost of a mortgage broker is worth it, you should remember all the potential benefits of using one. Securing the best interest rate could more than cover the cost of the mortgage broker, with all the other potential benefits like saving time and effort.

Potential biases 

While this is not always the case, some mortgage brokers may have ties with particular banks and lenders. This may lead to instances wherein they attempt to influence you to opt for those providers rather than providing an unbiased, holistic view. 

To avoid this, ensure you are working with an independent mortgage broker who does not have direct ties to any particular lenders.

Should you use a mortgage broker?

Having understood the pros and cons of using a mortgage broker, let us proceed to the main questions, “Should I use a mortgage broker?” or “Is it worth going through a mortgage broker?” 

A mortgage broker aims to ensure you obtain the best mortgage, bringing you one step closer to your dream home. Here are some factors you should consider before deciding whether a mortgage broker is a fitting addition to your journey:

• Whether you are comfortable with paying a fee for their services 

• Whether you know enough about Dubai’s real estate market and mortgage system to secure the best mortgage without a broker.

• Whether you can commit the time required for research, applications, paperwork, etc.  

• Whether you have found a mortgage broker who you feel is trustworthy and with whom you want to work,

How can you tell if a mortgage broker is reliable?

A somewhat underrated aspect while weighing the pros and cons of using a mortgage broker is understanding how reliable a mortgage broker is. You will encounter many mortgage brokers in Dubai, but doing your due diligence and opting for the most credible one will make your property mortgage process smooth and hassle-free. 

Here are some factors to consider while determining how reliable a mortgage broker is:

• Their credentials. A reliable mortgage broker will have the required licenses and a proven track record for helping people obtain the right mortgage. 

• Transparency. Credible mortgage brokers will be highly transparent about the entire process, their fees and services, the lenders they work with, and more. 

• Testimonials. Client reviews and testimonials are great ways to understand a mortgage broker’s reliability. You can usually find such reviews on Google, the broker’s website, or other platforms. 

What should you expect from your mortgage broker?

Mortgage providers provide various services - some of which may or may not meet your needs. While pondering, “Do I need a mortgage broker?” remember the services they provide and whether they will be of value to you.

Some of the services most mortgage providers offer include:

• An initial consultation wherein they discuss your finances, budget, and house purchase goals. This should be an opportunity for them to learn about you and for you to learn about them.

• A mortgage comparison wherein different loan options will be presented to you by the broker - and the terms, conditions, and offerings of each loan will be outlined to you. 

• Application assistance, wherein the broker helps you complete and submit the required documentation for a mortgage. 

• Ongoing support in the form of assistance during any issues or concerns and any mortgage-related questions you may have. 

Final verdict

Only after carefully evaluating the pros and cons of using a mortgage broker for your homebuying journey in Dubai can you answer the question, “Should I use a mortgage broker?”.

Whether you are looking for an independent mortgage broker or a real estate expert to help you find your perfect property, Engel & Völkers is here to help.

With over 45 years of real estate expertise, tailored services, and in-depth local market knowledge, Engel & Völkers is your go-to real estate agent for a smooth homebuying journey.

Our team of expert mortgage service advisors will guide you through the process one step at a time, ensuring that you make an informed decision.