Finance
There are different options available to clients wishing to finance their property purchase. The route that you decide upon is normally largely dictated by your personal circumstances. Once you have decided to borrow locally in the UAE or to raise your finance internationally the next choice is often whether you choose to deal with the bank/ lender direct or if you prefer to enlist the assistance of a mortgage broker.
We will be happy to refer you to one of our established contacts who will be able to secure finance for your purchase.
Local banks
The mortgage market in the UAE is still very young and most banks will still look at the Original Price when calculating the level of lending available to an individual. For residents of the UAE, 80% is achievable and 70% for non-residents. The market has evolved over the last 12 months and lending has improved to take account of Premiums. For example, on a completed villa where the Original Price was 1m AED and the re-sale value is now 1.3m AED, the bank will not only lend 70% of the Original Price but will lend on a proportion of the Premium as well, subject to valuation. When applying for lending on a property during construction, the bank will tend only to lend on the Original Price and not the Market Price.
The private developers are generally tied to one lender and offer a set percentage loan. Some private developers offer no lending at all which must be considered for re-sale.
This market will become more competitive (currently 13 lenders in the market including four international banks - Standard chartered, HSBC, Llyods TSB and Barclays) and improve as more properties come to completion and will be a contributory factor to continuing price rises.
Other banks
An attractive alternative to taking out a local Dubai based mortgage is to raise the capital from your main bankers or a bank in your home country. You may decide to release equity from your existing property or borrow against other assets. Lending criteria will vary from one country to another and from lender to lender, so a degree of shopping around is usually recommended.
Raising your finance using other property or assets as security can also mean that you are able to secure the property that you want, even if it does not currently have local UAE based lending in place.
Mortgage brokers
When buying a property in a foreign market it is often advisable to use an independent mortgage broker, who is familiar with the market, the lenders, their offers and suitability to your needs. They will often take much of the hard work away from you, advising on every aspect of the lending process.