Investing in property? American finance guru reveals 'right time to buy'

American personal finance guru Suze Orman has helped millions of women around the world take charge of their financial health and thrive‭. ‬And now‭, ‬for the‭ ‬first time‭, ‬The‭ ‬New York Times‭ ‬bestselling author is turning her gaze towards the Middle East‭, ‬as she advises‭ ‬Khaleej Times’‭ ‬readers exclusively‭ ‬on how to manage their money in the smartest way possible‭. ‬From tackling debts to making sound investments to saving for retirement‭, ‬Orman will address your pressing financial queries‭. ‬

Q: Should I wait for UAE mortgage rates to fall?

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 — Susan Nair

Let’s start with this truth‭: ‬You don’t buy a home based on what interest rates might do‭. ‬You buy based on what you can afford today‭.‬

If you can comfortably afford the mortgage payment‭ ‬—‭ ‬including insurance‭, ‬property taxes‭, ‬maintenance reserves‭, ‬and still have at least an eight-month emergency fund after your down payment‭ ‬—‭ ‬then you’re in control no matter what happens with rates‭. ‬

Yes‭, ‬the US Federal Reserve may continue to cut rates‭, ‬and because the UAE dirham is pegged to the US dollar‭, ‬the Central Bank of the UAE often follows the Fed’s lead‭. ‬But rate changes don’t move in perfect sync and it can take months before Dubai’s mortgage lenders adjust‭. ‬Meanwhile‭, ‬property prices in prime areas may rise‭, ‬wiping out any benefit from a lower rate‭.‬

But let’s be honest‭ ‬—‭ ‬there’s more to buying a home than interest rates‭. ‬You must make sure the home itself is financially and structurally sound‭. ‬Don’t rush into a deal just because you can‭ ‬“get approved”‭. ‬Ask‭: ‬Is this home truly worth the price‭? ‬Or is someone unloading their unseen problems on me‭? ‬Is your source of income secure‭?‬‭ ‬Never buy a property based on optimism‭. ‬Buy it based on stability‭.‬

Here’s what I want you to do‭:‬

1. Lock in affordability‭, ‬not hope‭. ‬Keep total housing costs under 30‭ ‬per cent of your income‭.‬

2. ‬Run the‭ ‬“stress test”‭. ‬Could you afford that home if rates rose slightly‭? ‬If yes‭, ‬move forward‭.‬

3. Think long-term‭. ‬The goal isn’t the lowest rate‭; ‬it’s lasting security‭.‬

Because the right time to buy isn’t when rates fall‭. ‬It’s when you’re financially strong‭, ‬your income is steady‭, ‬and your home is built on solid ground‭.‬