# Getting an expat mortgage in Dubai



## manchesterborn (Jul 4, 2011)

Hi. 
The apartment I am currently renting comes to the end of its rental agreement on the 10th feb and I have to decide whether to rent again or actually look at buying. I own a property in the UK but nothing in Dubai and so I am unsure of how different the process is. 

First question is, do I have enough time to get a mortgage sorted at fairly short notice (it is the 1st jan today and I need to have the keys to the door by the 8th feb)? I had my mortgage in the Uk go through in less than 28 days but I don't know if the process is as quick over here. 

I have seen that I need to budget around 8% on top of the value of the property to cover all fees relating to buying a property. Can this amount be added onto the value of the mortgage I take out, or do I need to have the funds available myself? I have enough money saved up for the deposit, but when you add all the fees on top of this, I don't have enough. 

Thanks


----------



## Visp (Mar 23, 2013)

I would be very hesitant to take out a mortgage with a bank here. You have no guarantee that the terms you agree on will be honored by the bank. They change interest rates and prepayment penalties at their whim, so all of a sudden you find your monthly payments doubled and a prepayment penalty so steep that you have no hope of getting out of the loan or refinancing.


----------



## Chocoholic (Oct 29, 2012)

You can have fixed rate contracts. Deposit? Expats can now get a mortgage for only 75% of a property value - so you'd need 25% of the purchase price. Registration fees to the Land Department for title deeds etc have just gone up to 4%, plus an extra 0.25% if it's a mortgaged property, then there's service and maintenance fees of which you need to put down 6 months worth as a deposit, then quarterly cheques for the rest.

Some developers only work with certain banks. It's a mine field here - honestly having gone through all of this myself, my honest opinion is don't buy here - it's completely unregulated.


----------



## manchesterborn (Jul 4, 2011)

Thanks for that reply choco. So the percentage breakdown that is given in these fees, is that a percentage of the purchase price? This all seems so so high as for example, if you purchase an apartment for 1,000,000aed, by the time you add on all the op mortgage fee, land registry fee, agent fee etc its about 10% of the purchase price - so another 100,000aed - or otherwise known as enough for a deposit alone!!!! What are the sort of general maintained charges etc that you said have to be paid 6 months up front? Imagine a typical 2 bed apt in terms of size etc. Can all these fees be added onto the amount you borrow in the mortgage? In the UK for example, the arrangement fee, usually about 6-10k aed can be added onto how much you borrow rather you paying it upfront.


----------



## xxxxxxxxclownfish (Dec 15, 2013)

We also thought long and hard about buying our apartment, mainly to save us from being ripped off by greedy landlords and having to move annually, especially in the run up to Expo.

We have enough cash saved to pay the deposit and were going to take a bank loan for the balance (4 year bank loan with high monthly repayments, but do-able).

We decided against it for many reasons:

1. The quality of building here is just diabolical - there are massive cracks appearing in my building, just above the foundations, the pipework leaks constantly and the electrics leave a lot to be desire.

2. There is no regulation for house owners and you just never know if the UAE will suddenly turn against non-emirati landlords and bring in a whole raft of measures to protect its own, or bring in huge taxes for ex-pat landlords, or worse.

3. I would never pay iro of $250k for a one-bed apartment back in my home country!

4. Every man and his dog thinks they are going to make a quick buck on the back of Expo. The guy who has bought my apartment tells us he is going to sell it in 2019 and thinks he will make a killing - yeah, you and half of Dubai mate!

5. I own freehold properties in my home country, outright and pay a modest amount of income tax on the rental income. Small price to pay I think to protect my money, property and future.

6. Given the ridiculous rental increases being demanded and the amount of money banks are lending, I am convinced there will be a small blip (hesitant to use the word crash) before 2020.

Personally, I would never do it here, and would either release equity from my houses or get a fresh mortgage to buy another one.

Good luck though with whatever you chose to do and I may well be kicking myself in 7 or 8 years at having lost out on a nice fat profit.


----------



## Chocoholic (Oct 29, 2012)

Yup it's percentage of the purchase price. Service charges to give you an example, mine is a 1 bed approx 900 sq feet and the maintenance charges are 12,000 dhs for the year.


----------



## sammylou (Oct 29, 2012)

i can't disagree with the points that clownfish made. we considered them all as well however we decided to go ahead and buy. these were *our* reasons. they may or may not be right for you.

- rents are ridiculous and we get a housing allowance paid to us directly so thought it best to get some equity out of it

- we refused to consider anything other than an Emaar property given what we knew about building standards. our building is well maintained, tanks cleaned regularly, etc.

- we ended up buying the place we had been renting. we got a very good price for it and the sellers were very easy to deal with. neither of us had [or liked] real estate agents so we did it as a direct sale and we hired a lawyer to handle the paperwork/mou. it cost us much less than the agent's commission.

- the new 4% is a hefty charge. we bought just before it went up so was only 2%. note that friends of mine are buying now and managed to get the seller to agree to split that cost so they are still only paying 2%.

- we love our apartment and location. we know we are going to be here for several years minimum. that being said we still view this as an investment and will keep our eye on the markets.


in regards to the initial post about mortgages and timings etc. here is what i know or experienced.

- pre approval for mortgage can be quick and easy, it's a lot of the other s**t that takes time. in order to obtain a mortgage here you must have a life insurance policy for the sum of the mortgage. getting the policy took about three weeks of back and forth and we had to have medical records transferred from canada due to a preexisting condition that they wanted more history on. keep in mind then that you will also now have monthly premiums for the policy if you don't already have one from your employer.

- the bank will require a property valuation. we paid 2500 dhs for this. the bank will not extend a mortgage beyond the amount of the valuation.

- i do not know if the bank will extend a mortgage for more than the actual purchase price. my gut says no but you'd have to call around. alternatively you could see if your bank will extend a line of credit to help cover the cost of the fees.

- all of those fees/percentages are indeed of the purchase price so take it from there. you are pretty much looking at about 8% on top of the price.

- if the seller has any mortgage left then your bank has to pay their bank off then their bank will send your bank the title deed and no objection to selling. this can take up to 30 days.

- if the seller has no mortgage then you better hope they actually have the original title deed. i have friends who tried to buy a place and the landlord had somehow never properly registered the place with the dubai land department and it took about 2 months for him to get a title deed. can't buy/sell without this.

- once you have the seller's bank's noc and a signed mou you must proceed to developer's offices [in our case emaar] and obtain an noc from them [plus pay a fee]. note that this noc is only valid for 15 days so you must get to the land department within this time for transfer. we also paid a refundable deposit of 5000 dhs as a promise to deliver them a copy of the new title deed [in our names] within 30 days of issue of the noc. 

- then with all that you can finally go down to the land department for the transfer. booking the appointment is often up to the bank as they will have a rep who will book several of their clients in one day.

- because of the red tape involved in the mortgage process you may find some sellers unwilling to deal with you. they will only want cash buyers in order to expedite the process.

- if you have a real estate agent handling the affair be wary. do your own research and double check everything. many of them really don't know what they're doing.

- our sellers had already paid up the rest of the year in maintenance fees [there were four months left]. we did a simple proration on what they paid versus the day we took possession and simply reimbursed them with a personal cheque. at no point though were we informed that we needed to have any minimum payments made. emaar informed us we would simply begin to receive the bills by email in the new year. they will be quarterly. approx 28k dhs per annum for a 1600 sq ft 2 bed in marina. this is on par with what fees would be like in downtown toronto so i don't consider it exclusively a dubai thing.

- note that your dewa bill will change. as renters you pay 5% of the annual rent. as owners that figure changes to .05% of the purchase price. in our case it ended up being a little higher.

- all in all, from when we told the sellers we wanted to buy to when we actually made the transfer took 4 months however we were delayed by ramadan and various summer holiday schedules. personally i think your 28 days is extremely ambitious. but if you do decide to buy perhaps you could talk your current landlord into extending your stay by a couple of months?

hope this helps. i may have forgotten a step or two so feel free to ask further questions. ultimately we are happy we bought this place but i also recognize that our experience was perhaps easier than others'.


----------



## ashsigma1 (May 19, 2014)

manchesterborn said:


> Hi.
> The apartment I am currently renting comes to the end of its rental agreement on the 10th feb and I have to decide whether to rent again or actually look at buying. I own a property in the UK but nothing in Dubai and so I am unsure of how different the process is.
> 
> First question is, do I have enough time to get a mortgage sorted at fairly short notice (it is the 1st jan today and I need to have the keys to the door by the 8th feb)? I had my mortgage in the Uk go through in less than 28 days but I don't know if the process is as quick over here.
> ...


still looking for a mortgage, try hsbc or sc


----------

