UAE mortgages....who to avoid?

[apron]

Hi guys...after some advice. I am looking into buying a place in dxb. From those who have done it I would appreciate any advise on lenders, buying processes etc etc......any info gratefully accepted!! :ok:

[CAYNINE]

Barclays..... never ever go there!!!!

[Ketek400]

United Arab Bank is not too bad.

[777boyindubai]

I doubt you will find many friends of Tamweel....

[kingpost]

Amlak if they still exist. My 2 cents is to stay away from Islamic finance.

Standard Chartered have been very good, so far!

[BigGeordie]

I've found Standard Chartered better than most. I wouldn't touch Tamweel if they were the last lender on Earth.

[Kittty125]

I would agree that you should avoid Tamweel like the plague. An absolute nightmare to deal with in every respect.

[MrMachfivepointfive]

I believe the Tamweel tower has just experienced a hot redesign...

[zk-dxb]

One of the difficulties of getting a mortgage and working through all the process up to visiting the Land Registration Department and actually getting your title deed is that we spend up to 2/3 of each month out of Dubai.

I decided to use a Mortgage Broker who would be my point of contact and handle the process on my behalf. I've spoken to this guy, he is happy for me to post contact details.

I have no other connection to him or this company but I recommend him without reservation if you are looking for a Mortgage Broker to assist you.

[email protected]

mob 050 7013843

[scandistralian]

Thanks for the tip ZK-DXB :ok:

To blowout and buy a penthouse on the palm, or to stay sensible and buy a villa in the springs... what to do...:confused:

[harry the cod]

Scandie

Avoid any Nakheel managed property. Nakheel have no integrity and take no responsibility with their obligations. You may find yourself paying highly inflated service charges for below standard facilities or no facilities at all while they make you suffer as a direct result of non payment from a minority of owners. Poor security, gyms locked, no beach access, slow rubbish collection, no water in pools, no promised shops, the list goes on........

Penthouse on the palm sounds great, the reality is far less attractive.

Harry

[skytrax]

just avoid the mortgage

[apron]

Thanks guys for the tips......one question, why avoid the Islamic banking mortgages? For example ADIB seem competitive, from the outside in! :ok:

[ABBOT]

Avoid Mashreq, nightmare to deal with and expensive. Noor Islamic very good so far

[40&80]

The best thing about this lovely life is that it is full of choices.
Some choose to buy where they are a citizen, have a passport, and the right to reside, and vote.
They buy where there are property laws that are enforced and the title deeds are valid.
At a certain stage in a pilots career the money rolls in rapidly and they are offered choices of how to waste it by investing this money.

[Lucid]

My experience says...

Stay away from:

Amlak and Tamweel (the worst)

I recently dealt with United Arab Bank as they offered me the best offer.

PM me for the details..

L.

[BYMONEK]

40&80

I agree. I know many here who stay away from property and spend their tax free earnings on fast cars and faster women, boats and brunches, maids and manicures, pets and pedicures. The latest toys for the kids, the latest toys for them, fancy holidays and fancy food. 10 years later..... a crap provident fund and nothing much else.

Then there are those that took the chance and are now sitting pretty on considerable equity thanks to all that money that 'rolled in'.

As you say, life is full of choices. Amen for that.

[Easy Ryder]

Guys,

Can you recommend any lenders that will provide at least 85% LTV & will take into consideration the accommodation allowance.

Cheers

[Dropp the Pilot]

"then there are those who took the chance" and something more about the money rolling in....

I am a bit distracted just now by the young lady doing my pedicure, but does that reference refer to the shareholders of EPI or to the directors of that 'company'?

[bigmountain]

If you are a first time buyer and from Ek you stand a good chance.Most local bank do provide
Noor Islamic, emirates Islamic, Mashreq , Abu dhabi Islamic bank, standard chartered bank . All generally provide upo 15 % deposit schemes.
Also other banks will follow suit. Although Tamweel is quite a big player . Beware they are not overseen by the central bank and can vary the profit rates as their please. The banks on the other hand are governed by the central bank.
When looking for a home mortgage ,ask what are the processing fees. Some may charge 1% if the mortgage amount, and some no mortgage fees . Some offer Ek a discount
Check the penalties for early cancellation of your mortgage . Some are as high as 4% and some offer 0 %
Do you need to move your salary the Bank ( some require it for the 15% deposit)
What is the cost of the life insurance coverage.
If the first year profit/ interest is mentioned . What will the following years profit be and what will the rate track. Some banks apply a internal bank rate + the profit rate e.g Eibor + 3.5 so if Eibor is 2% then the rate of profit /interest will be 5.5% . Some banks may offer a starter mortgage rate as 3.99% but revert to 6% the following year as a minimum. Some banks offer a 3 to 5 year fixed rate.,which is good to plan out your installments for the medium term

Other aspects you need to look at, are the projects that the Banks are willing to offer mortgages for. The other part of our question about the accomodation allowance Most banks will include your utility allowance towards your mortgage ,provided it is included in your salary certificate. The company does provide such certificate.

BM

[Easy Ryder]

:ok: Awesome Big Mountain!

Thanks for taking the time to write a very informative reply. Much appreciated ;)

[Hook]

Would anyone care to comment on HSBC? What are they like?

The rate they offer seems quite good.

[bigmountain]

I would recommend Standard charterd over HSBC. The rate they are offering is bait just to gain your attention. But I just can't understand who comes with such ideas.Standard chart offers a similar rate but HSBC offers this only for a outrageous 60 % deposit . They generally have some short campaign to entice consumers. However, they generally have a higher rate for lower deposit. They are also very restrictive on properties finance.

I would like add , please ask all the questions, processing fees, about early payment penalty ,life insurance cost and last but not least , what will be the rate for the following years and what is it based on.

BM

[Easy Ryder]

Did any of you with a recent mortgage have to take property/life insurance from the lender? Or were you able to get your own from elsewhere if it is a 'must have'?

If you went independently do you have any recommendations?

[bigmountain]

Easy rider.
If you are looking for a bank that doesn't provide or specify the life insurance product, then, I would suggest UAB . United Arab Bank. They currently offer 3.99% with a fixed period of 3years and then returns to around 6% .UAB will accept your current life insurance policy or if you want to shop around try Zurich life, Salama etc. The good thing about UAB is that they offer no early payment penalty. So after 3 years if some other bank is offering a better rate you can always move. The other good point is that as they are reasonably small, they can usually vary the DBR ( dept Burden ratio) usually 50% of your income , to a higher limit based on your company profile (eekaa) .The negative point about UAB is the 1 % processing fee.

If you don't have any other mortgages in UAE. And basically looking for. Fixed installment amount based on 4.45% for the whole tenure without processing ,fees, including life insurance cover, and no penalty after three years . Then have a look at Abu dhabi Islamic bank. (ADIB) It seems to good to be true.
Couple points to look at
1 you need to get your salary transferred to the bank for Ltv of 85%
2. The monthly installments are fixed , however if the Eibor moves out of the band that they have offered this product , then your tenure is extended. So you know that you payments are fixed, but the EIBOR extends the life of the mortgage
ADIB are a fairly new player so have come out with a fairly innovative product.
I'm sure other banks will follow


Regards

BM

[40&80]

"Considerable equity" in a property I feel can be high risk if poorly located.
So choose it's potential sale location well... as located in the wrong place you could become stuck with it... and find it's upkeep in your absence expensive... it's inability to be relocated is frustrating if nobody wants to offer you the market price when your circumstances change and you are required to vacate the country.
Like you say it is all about choices.

[Easy Ryder]

Once again great reply Big Mountain! I owe you a beer or something!

I literally just got off the phone with ADIB, and I'm quite impressed so far.

4.49% floating rate
No pre application or process fees
No fire insurance
And no life insurance if you borrow 3.5m aed or less
Early settlement 0 if you sell, 3% if you close it early on own
Buy out fee of 3%
Can overpay by 30% per year with no penalties

My only concern is the buyout fee, if you remortgage you have to pay 3% on what's owing.

The only other deal that's near this is mashreq
All very similar but charge for pre approval and processing fee + property and life insurance

I will call UAB see how I get on

Thanks again
ER

[bigmountain]

Easy Ryder

That's where you will have decide after comparing options from various institutions. In any case I would stick with a bank rather than Tamweel and Amlak, as these two don't come directly under the central bank and willy nilly charge what they want. To give you an example Tamweel base rate is currently 7.4 % .. If you wanted to cancel your mortgage you would need to pay a whopping 4 % as early payment charges. However if you apply now you would be offered a low rate to hook you and perhaps lower penalty charges. But Tamweels track record is not really great. I recently tried to find out what my outstanding was with Tamweel and what it worked to was the principal outstanding+ 4% + service fees + additional. Aed 25000. /-.

Above all I find it very odd that none of the Banks or institutions will provide you with a copy of the mortgage contract that you are expected to sign.
The offer letter is given to you ,but that does not cover all the features and requirements of mortgage You will find that the contract will be given to you after you have already made the downpayment for the property and basically left with no room to back out as you have already signed and made a deposit on the property. So please ensure that there is some transparency at every stage.
Surprises to look for ; some banks ask for power of attorney in the banks name. Another odd one , asking for a letter from your company that will not transfer
salary to another bank.
By asking all the questions on this forum, you are doing your do deligence and sure will be able to cover most points but not all. However Dubai is still a frontier market and has just gone through its first ever down cycle. The property market has bottomed out and slowly but surely market is moving. If you have seen something you like and in your budget, I would suggest that you move promptly and also get a preapproval for slightly more than you want ,to offer you some flexibility due to last minute price increase. Prices are rising quickly!


BM

[apron]

And no life insurance if you borrow 3.5m aed or less.....
Easy Rider are you sure about this....just going through the process with ADIB at the moment and am paying life insurance for a 2.5m approx mortgage.....
:ugh:

[Easy Ryder]

Apron, I think it's BS, a line used to hook me in..... The formal email made no mention of that

On another note I've also been in touch with a broker, who has basically recommended the same ADIB offer. His fee for the same offer is 20000aed :eek: but has stated he will do all the running around etc to get the deal done and get lawyers to view contracts blah blah and make sure it's all legit.

So my qu is, is that kind of service worth that cash or should I do the legwork on my own?

Thanks again BM :ok:

[bigmountain]

ER

Try mortgage international . They are quite reasonable and did not ask for a fee.
Although this was a few months ago and this was one of the few proposal put forward. You will still have to do the leg work to get all the required paper work, but they do have some sort of relationship with the banks, so usually they are in a position to sort out any surprises for you from the beginning.
Ask for Richard.

Good luck

BM

[flareflyer]

Does anybody know of any bank or finance institution out of UAE that can offer mortgages in dubai?

Thanks

Flare

[40&80]

Guys..."Carry on Discovering"...and good luck...call back in 10years on how it all worked for you...and profits made and banked.

[apron]

Easy rider ......I'm doing the process direct with adib. The bank seems fine and saves the 20k u mention! Remember, u need to get the paperwork together for a broker anyway, so why not just fax it to the bank yourself :)

[Easy Ryder]

Thanks for all the help guys, good luck :ok:

[Easy Ryder]

U.A.E. Said to Cap Expatriate Mortgages at 50% of Home Value - Bloomberg (http://www.bloomberg.com/news/2012-12-30/u-a-e-said-to-cap-mortgages-to-expatriates-at-50-of-home-value.html)

Expat mortgage cap sends shockwaves across UAE banking sector - Emirates 24/7 (http://www.emirates247.com/business/economy-finance/expat-mortgage-cap-sends-shockwaves-across-uae-banking-sector-2012-12-31-1.489341)

Don't buy yet if you've managed to avoid guys n gals......

[flyinthesky]

And what will this serve to do???

Drive rents even higher since many fewer expats will be able to buy.

And guess who the majority of the landlords are?????

Classic!

[Laker]

I think it will do the exact opposite. This recent mini recovery and subsequent rise in Dubai property values seems to have been driven largely by end users. Forcing them out of the market creates less demand and fewer transactions. I think we will see more properties sitting unsold on the market and being converted back into rentals. Makes you wonder why they instituted this law so early in the recovery. Are they trying to inject more liquidity into the local banks?

It's easy to forget that Dubai is a place where the rules change overnight and the playing field is rarely level.

[40&80]

I think the UAE banks like those in Europe and the UK and are probably bust... the UAE Central Bank action obviously indicates they feel their banks have a problem.
The UAE has an insufficiently large tax payer base to bail their banks out.
Exchange control on the amount of non national money allowed to leave the country if they follow the same route as Kenya.... not good news for pilots or airlines or anyone based there.

[InnocentBystander]

This was obviously and as usual not thought through. Stand by for the "Clarification" and then the "Clarification of the clarification"...

[falconeasydriver]

Ho hum, bah humbug, caveat emptor etc etc..
What does anyone expect? this place is not a western democracy, it is rule by decree and hence rules can change on a whim, at least though it'll get rid of the spiv's and chancers.

[Stratosphere6000]

UAE's biggest bank urges rethink on mortgage cap - The National (http://www.thenational.ae/thenationalconversation/industry-insights/property/uaes-biggest-bank-urges-rethink-on-mortgage-cap)

[Silky]

Any update on best mortgage?