Whether to opt for cash or mortgage is one of the major dilemmas people face when completing a big real estate transaction which is buying a home in Dubai. Having their own sets of pros and cons are both these options.

As there is no lending involved and neither are complications associated with it, on paper, buying a home on cash seems like a better idea. The process however isn’t exactly that simple. For a single transaction, you are using all your life-savings at once. In case of an emergency, it may leave you in a lurch.

Before making the final call this is why it is important to consider both these options and weigh their pros and cons.

Benefits of Using Cash

No Interest
The buyer doesn’t have to pay interest is the biggest of all benefits if you want to buy property in Dubai using cash. The borrower has to pay the interest along with the principal amount which can prove to be an additional burden on the pocket as on the other hand, in the case of mortgaging.

Sellers Prefer Buyers with Cash
Preferring buyers who are willing to make payment in cash is mostly sellers and developers. As there are no bank approvals and other such complexities involved, this shortens the whole process. The property is reserved under the name as the buyer only has to pay the cash. They can immediately shift their belongings there without any ado if the property is ready to be moved in.

Cash Discount
In order to encourage cash payments, offering a special discount known as cash discounts are some sellers and developers. Buyers can save more money while buying the property this way.

This discount doesn’t come with all properties which are important to note. Giving the discount is only to selected sellers.

No Restrictions
An individual has to meet certain eligibility criteria to be able therefore to get their loan application approved in case of mortgage/home loan options. With cash financing, however, this isn’t the case. Regardless of their credit score and history, anyone can buy a property with cash. There are no eligibility criteria to be met furthermore.

The Flipside
It leaves one with limited to no financial resources as they have used all the cash they had to make the payment as the flipside to using cash, as stated earlier. Depending on the market conditions, this blocks their funds until they can sell their property which in some cases can take a long time.

Benefits of Mortgaging

Suitable for People Who Can’t Arrange Cash

The most prominent benefit of going for the option of a mortgaged house in Dubai comes to be that it is suitable for those who can’t arrange cash without any doubt. Turning their dream of becoming a homeowner into reality is this way, the salaried people. In the city, banks and financial institutes offer different types of mortgages. Securing the deal of a residential property that suits their interest are those buyers interested in selecting any type that deems suitable to them.

Save Up for Emergency Situations
Preferring mortgage options as it helps them to save up for emergencies are some people even if they have sufficient cash.

Financial Flexibility
An individual gets more financial flexibility with mortgaging. They can apply for more than one loan and invest in different projects if their credit score is good and they maintain a robust credit history. It is not needed that they have to be in the same industry. It also allows them to earn more profit as this not only diversifies their investment portfolio.

The Flipside
The additional amount the borrower has to pay as the interest is of course the flipside. The interest keeps accumulating making it even more difficult for them to manage repayments in case the borrower misses out on paying an instalment.

Final Verdict
The ultimate choice is yours all in all. Decide by carefully analysing your financial situation. A cash purchase is certainly a better idea if you have sufficient money and surplus funds to tackle emergencies. Go for a mortgage option to thereby secure the deal for the house for sale in Dubai you wish to buy in case you don’t have enough cash. You will face difficulties in getting your loan application approved however if you don’t ensure that you have maintained a good credit score and history. So be alert.