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The Basics

Before we talk about how to go about looking for a mortgage in Dubai, here’s some Dubai mortgage industry background.

About 15 years ago the UAE took the plunge and began to offer mortgages but only through 2 or 3 lenders. These days were easy-ish! People wanted to buy and Dubai was booming. It was (and still is) a tax free economy. Stories of expats mortgaging themselves ‘up to the hilt’ in their home country to enable them to make a property purchase in Dubai were commonplace and of course although none of us saw it coming, things were to become fraught with difficulties when the credit challenge knocked on everyone’s door.

‘Flipping’ was easy to calculate and easy to do and purchasers were pocketing a ‘nice little earner’ when they sold their investment property a month or two later (and sometimes only a week or two later). Everyone seemed hell-bent on getting what they could but inevitably, a price must be paid for greed. Or is it just the fact that we now live in a consumer driven world where capitalism is looked at as the healthy option?

The Dubai Mortgage Market – A Few Years Ago

What made the boom, boom (if you get our drift) was partly due to the buoyancy of the international marketplace but what put the icing on the cake was that in 2002 it was announced that the property ownership rules in Dubai would change – these were legalised in 2006.  The Dubai brand was being built by international marketers and design agencies, simply adding to the frenzy.

Everyone and his (oops, non-sexist comments here, her) dog looked at Dubai as a luxurious getaway with an easy 6 – 8 hour flight from most European countries. One of the favourite areas for expats purchasing properties was in Dubai Marina where the first of the 6 Emaar Towers was completed in 2003. Emaar is recognised as one of the quality developers in Dubai. Dredging of the large 3km long manmade canal began in 1998.

The new property ownership rules in Dubai allowed 100% freehold and leasehold ownership for UAE expatriates in designated areas throughout the UAE. These new rules became the massive catalyst to the Dubai real estate mortgage market.

The Dubai Mortgage Market – Today

Today the Dubai real estate mortgage market has grown to over 50 lenders offering more than 150 different mortgage products. These mortgage products vary greatly in regards to their terms and conditions, products features and limitations, and unless a borrower has the knowledge, experience and time to identify the most suitable product for their circumstances most borrowers would be wise to seek the advice of a professional mortgage consultant. When it comes to researching the market and identifying the best mortgage product for your requirements this should be the remit of an experienced and qualified Independent Mortgage Consultant who can save time, money and stress when it comes to what can be the largest single purchase a client will make in their lifetime.

There are currently 15 Independent Mortgage Consultancies in Dubai which offer various degrees of service in securing a mortgage and assisting a client with the property buying process. These consultancies vary greatly in size from owner-operator set-ups through to the largest mortgage consultancies in the UAE which have over ten consultants on staff.  Some consultancies help with simply securing a mortgage, while others will assist the client throughout the complete buying process until the actual transfer of the property into the name of the new buyer takes place. It’s important to be clear with the consultant what level of service they provide. So double check that the service you are expecting is the service the mortgage consultancy is providing, i.e. always check the small print.

Independent Mortgage Consultants charge a fee for their service which varies by the work they do and the experience and knowledge they can provide. These fees can be a simple flat fee and/or a percentage fee based on the desired mortgage amount. It is important for a client ask the right questions and to know exactly what they are paying for and have a clear understanding of the responsibilities and duties of the consultant before agreeing to; and signing any Terms of Business.

Looking for a Mortgage in Dubai or Abroad?

We’re adding more information about mortgage products, mortgage consultancies and FAQ very soon. Check back here if you’re looking for a mortgage in Dubai.

 Casa Capital, Mortgage Consultants, provided some of the nuts and bolts for this article. Thank you Casa Capital!

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