Posted on: 31-03-2016 in Mortgage & Property
When it comes to securing a mortgage in the UAE, as in any other foreign country, you need to be well versed in the rules and regulations of the nation and its banking and real estate procedures. Beyond just getting a general overview, you should really dive into the details. And you need a positive, determined attitude.
There are many parts of the UAE mortgage process you cannot control – like any financial process. If you get involved, there are certain procedures you agree to let others handle for you. It’s just the way it works.
However, there are aspects of the UAE mortgage process that UK expats can control. You just have to know where they are. Here are some ways you can take control. Dominate the details with these ten ways to ace your UAE mortgage:
2016 is a buyer’s market for UAE residential properties. During 2015, prices fell by as much as 15% in some residential markets, with UAE analysts broadly agreed that the trend for 2016 remains downwards. Act decisively now before lending rates rise – which they will eventually if the price of oil stays low.
Before you start out on your mortgage journey, get yourself some first-hand directions – lots of them. Ask people you know how they got on with the process you are facing. Be specific. How did your friends get a mortgage? Did your colleagues use a mortgage broker? Does anybody in your family know of an estate agent you can trust? The more you know about the experiences of others, the less likely you are to fall into the traps they did.
Do not falter here. Introducing the golden rule of buying a property in the UAE – research and arrange your mortgage before you launch into the exciting business of finding a place. You will miss out on many opportunities if you do not. Many sellers will not even discuss a sale without a pre-arranged mortgage in place.
UAE mortgage lenders are thin on the ground compared to the giant UK market. This is good news for the UK expat. With fewer lenders, you have more time to research – with aggression – the nitty-gritty of what is on offer. Make a decision you can trust.
For starters, here are three good questions to ask potential lenders:
These details are often tricky to nail down. But at Holborn Assets we have specialists who, as Jo Philips, General Manager of the Mortgages Division, reports, “can search the whole of the market for you and guide you through the end-to-end process.”
Think ahead. Whatever mortgage you go for, remember that you will need to pay an extra 7.5%-8% of the purchase price on assorted fees – plus on-going maintenance and service fees when you move in.
Take on a partner with a special skill: the one thing a broker can do that a lender cannot give you an impartial overview of what loan offers are out there. Dealing with the mortgage market every day, a broker is perfectly-placed to find and tailor you a deal that suits your individual circumstances.
When you start scanning for a property, be aware that you are looking for a long-term investment. So be canny. “Choose a promising area,” says Jo Phillips. “This doesn’t mean the most expensive or cheapest. “Promising” means where people want to live for a variety of reasons.”
Zoom in on distressed sales. You will get more bang for your buck from sellers forced to cash up fast, particularly in a buyer’s market.
Once you’ve signed a loan deal, your lender will want to secure you and your repayments for as long as possible. So do not be scared to push back as your mortgage progresses. Could they be offering you a better deal? If not, why not? Make your lender aware that your finger is never far from the “transfer mortgage” button. But do not press it without knowing exactly what you are doing.
If you do decide to transfer your loan, you may be hit with a transfer fee you agreed to when you signed up! It may be too late to change that now. But, this time around, make sure you get ALL the details of a deal before you commit. And bear in mind also that – on top of any lender fees – UAE Central Bank charges a transfer fee of 1% of the loan amount, or Dh10,000 (whichever is lower).
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Holborn Assets operates from the heart of the UAE mortgage sector.
We are always glad to be reporting back on behalf of UK expats.