When assessing your home loan application, UAE banks do not look solely at your monthly paycheck. They perform a strict Debt-to-Burden Ratio (DBR) check. Under Central Bank regulations, total monthly debt obligations cannot exceed 50% of your gross monthly income.
How Credit Cards Dangerously Reduce Borrowing Power
A common pitfall for buyers is holding high credit card limits. UAE banks calculate 5% of your total credit limit as a monthly debt liability, even if your card balance is zero.
Example: A credit card with an AED 100,000 credit limit adds AED 5,000 in monthly debt to your DBR calculation. Closing unused credit cards or lowering limits immediately adds up to AED 700,000 back to your potential mortgage limit!
3 Steps to Boost Your AECB Credit Score Before Applying
- Request Official Credit Card Closure Letters: Merely destroying a card is insufficient; obtain a bank clearance letter.
- Clear Personal & Auto Loans: Pay off high-interest personal loans to free up monthly DBR capacity.
- Pay Utility & Telecom Bills Promptly: Etisalat, du, and DEWA late payments directly impact your Al Etihad Credit Bureau (AECB) score.
Optimize Your DBR Ratio with AskTaskers
Want to maximize your home loan borrowing limit? Post your income profile on AskTaskers to consult with mortgage brokers.
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