The Perfect Applicant (May 2009)

At the moment, the banks in Dubai are all looking for the perfect
applicant. In an ideal world every applicant would be employed, a
resident of Dubai for over a year, with a high monthly guaranteed
salary, someone who is purchasing a villa from a master developer with
a 30% deposit. Unfortunately, not many people fall into this category.

The good news is that we are moving in the right direction as two major
banks have re-opened their doors for mortgage lending, and this should
have an impact on the local banks.
Understandably, many people are being very cautious about buying a
property here in Dubai for a number of reasons.  One being that they
believe the property prices are still going to fall and also because
they believe they cannot get finance as the local banks have extremely
strict lending criteria at the moment. 

 What a lot of potential purchasers do not realise is that they can
apply to the local banks for an “Agreement in Principle”. This will
then put them in a strong position when they make an offer, and give
them confidence in signing an MOU, as the finance is already in place.

There are a number of things we can all do, and put in place in advance
that will put us in a stronger position when we do apply for an
approval.

Documentation


Firstly, the lenders are going to require a lot of supporting
documentation. It is a good idea to start collating this over the
months that you are looking for a property. Don’t be alarmed by this.
It is required here as we do not have a Credit Reference Agency in the
UAE so they have to be comfortable with the risk.  If you present the
case to the lender, packaged the way they require, it will make the
process a lot quicker and smoother.  A case needing repair will take
far longer.
Request Payslips from your employer (if possible), breaking down your salary.

If you are employed, ensure that your salary is transferred into an account every month on time.
If you are self-employed you will need 2 years audited trading accounts. Use a reputable company.
Also, if you are self-employed the Lender will ask for your website
address. This is to build confidence in your company. If you don’t have
a website, it would be advisable to have one up and running. 

Deposit

You will be required to pay a deposit towards your new home and this
will be between 20% and 30%.  If you need to raise this elsewhere, this
will need to be in place for disbursement. Your mortgage advisor should
be able to look at re-mortgaging and possibly releasing any equity,
should you own a property in your home country.

Monthly Outgoings

The Lender will look at your monthly expenditure in great detail, and
they will look more favourable at an applicant who has surplus income
in their accounts at the end of each month.
In most cases they will expect your mortgage payment, Credit Cards, and loans to be no more than 50% of your monthly income.

Developer

Before signing an MOU with a seller or agent, please check with your
lender that they are happy to fund the developer and the development.
If you are purchasing from a master development you should have no
problems.
Why use a Mortgage Broker?

The mortgage market in Dubai is changing on a daily basis. The lenders
are changing their policies and Criteria often and also the Housing
Market is changing frequently.

Ensure that you use a reliable and qualified Mortgage Broker, who
specialises in Local (or international if you are looking to purchase
or re-mortgage in another country). They will be able to package the
case in a way that each individual lender will require. They will give
you impartial advise on the processes and requirement, and they will
guide you through from beginning to end.  Your Mortgage Advisor will be
the ‘middle man’ who will update you throughout and chase and liaise
directly with the bank, as they would have built up a relationship with
them over time. Please make sure that you ask to see a copy of their
qualifications to give yourself confidence in their ability to do the
right thing for you.

{xtypo_rounded2} Hayley Lewis is an Independent Mortgage Consultant
with Holborn Assets.  Hayley has extensive knowledge of the Dubai
mortgage market & is UK CeMap qualified, previously working for
Barclays (Mortgage Division) in the UK.  Contact Hayley
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