Obtaining mortgages in the UAE

[jackcze]

While the UAE market was booming, lending institutions were more than happy to offer 90% or 95% finance. This changed dramatically in September/October 2008.

Suddenly lenders realised that the UAE market is capable crushing and reacted by tightening their policies. This, as much as anything else, contributed to the property price drop across the UAE, as people found it increasingly difficult to borrow.

Having said all that, it is still possible to obtain finance as long as it fits into lenders’ criteria. I have attempted to summarise some important points:

• The lenders prefer lending to residents of the UAE.
• For residents, the maximum lending ratio is approximately 85% for completed properties and 80% for under construction.
• For non-residents, the maximum lending ratio is 70%.
• The interest rates vary from about 8% to 9.5% for residents. Interest rates for non-residents start at around 9%.
• Certain industries are not acceptable including: real estate sales, property development, construction, hospitality and even banking in some cases.
• All existing finances must be squeaky clean because the lenders go through everything in great detail.
• Generally the only acceptable loan purposes are property purchase or refinance of existing debt. Equity release is generally not permitted.

Other credit criteria apply so please let me know if you have any questions.

[wottodo]

Very useful information.

Do you know by any chance which institutions are lending to non UAE residents?

I have tried a few of the "major banks" however as I no longer live in the UAE they currently cannot lend to me. The word currently was slighlty reassusring I must add.

Hope you can help.

[jackcze]

The lenders which will still consider are RAK Bank, Mashreq and Badr Al Islami. As a non-resident it can be a difficult to organise finance here. If you would like me to assist you with organising the finance, you can email me directly at Property Finance Link on 971 50 768 4059. The system won't let me include my company email address so please contact me if you wish.

Regards
Jack