Get the mortgage first and the property second. Shop around, both on your computer and in the bank branches. Be willing to haggle. And be sure not to forget about all the ancillary costs. Harvey Jones speaks to the experts
It is easy to fall in love with a property. Arranging a mortgage to pay for it takes a little longer. With 31 mortgage lenders in the UAE, it is worth taking time to find the right deal for you.
You should get your mortgage in place before you start looking for property in earnest, says Raman Muralidharan, a regional head of customer value management at HSBC. "Once you have your approval in principle, you know exactly how much you can borrow, and your property price range. At that point, you can start property hunting seriously."
If you don't have your finance in place, you risk finding the property of your dreams, only to lose it because you're in no position to bid. Or you may lose the 10 per cent deposit that you are obliged to put down to secure a property, if you are subsequently turned down for home finance.
Under Central Bank rules, your monthly mortgage instalments, and other debt repayments, should not consume more than 50 per cent of your income.
You can get a rough idea of how much your mortgage will cost each month by using a free online digital calculator offered by many lenders, including HSBC, Mr Muralidharan says.
Many applicants simply go to their existing bank for a loan, but you may get a better deal by shopping around to compare rates and product features.
If that sounds daunting, you can ask a mortgage broker to do the legwork for you, says Sam Wani, certified mortgage adviser at Independent Finance, Dubai.
They can also can help with application forms, mortgage insurance, salary transfers, liability letters and other paperwork.
Or you can do it yourself, comparing deals at the growing number of price comparison websites, such as Souqalmal.com and Moneycamel.com. These show rates both from international banks operating in the UAE, such as Barclays, HSBC and Standard Chartered, and Islamic finance from local lenders such as EmiratesNBD, Mashreq and Abu Dhabi Islamic Bank.
These sites allow you to compare mortgage rates, loan-to-value ratios, maximum loan amounts and other mortgage features such as cash back, says Richard Paul, director of UAE valuations at the property broker Cluttons.
"It isn't too difficult to find the best deal yourself. Although mortgage choice is growing, it is nothing like, say, the UK, where there are more than 10,000 loans to choose from."
You might even be able to do a spot of haggling. "If you find a good deal from one lender, you could use that to get a better deal elsewhere. Lenders are unlikely to cut their headline rates, but they may offer, say, a lower fee or higher loan to value, depending on the product."
Legal fees tend to be lower than in the West and the conveyancing process swifter.
Personal factors will affect the type of loan you can get, or whether you are offered a loan at all. "You will be in a better position if you have been here sometime, have a stable job, a family, and are committed to the area. If you are single and have just been here for a few months, getting a mortgage can be tricky," Mr Paul says.
You might face obstacles you would never expect in the West, says Warren Philliskirk, associate director at Mortgage International Business Dubai. "Banks don't like two unrelated people buying together, whether partners and friends, and even other family members, although father and son is fine. It isn't a problem for single women, though."
Banks feel safer offering loans on villas. "Apartments are thought to be slightly more risky, because there is a greater supply, but many lenders will still offer mortgages on apartments on the same terms."
You are free to pay off your loan early, typically with a 1 per cent early foreclosure charge. Or if you want to borrow more money later, you can apply for a top-up loan from your own bank.
Expats can typically borrow up to 85 per cent of a property's value, and Emiratis 90 per cent. The Central Bank has suggested introducing a loans value cap to cool the property market that would reduce the maximum loan value to 75 per cent for expats and 80 per cent for Emiratis for initial purchases, and 65 per cent and 70 per cent for further purchases.
You also have to decide whether to take a fixed or variable rate mortgage, Mr Philliskirk says. "The most popular type of deal is a two-year fixed, with rates starting at around 3.99 per cent. You can get a five-year fix at 4.99 per cent but there is little interest in them, because few people expect interest rates to start rising in the immediate future."
These deals are much cheaper than before the financial crisis, when mortgage rates were as high as 9 per cent.
When working out how much you can afford, don't forget to calculate the cost of setting up a mortgage. This will include an arrangement fee, typically around 1 per cent of the loan value, a valuation fee of around Dh3,000, and the cost of compulsory life and household insurance.
If you use a mortgage broker, you will also have to budget for their fees.
That dream property could be yours. With a little effort, you can find a dream mortgage to pay for it.
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COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
Company Profile
Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000
Sly Cooper and the Thievius Raccoonus
Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5
The biog
Favourite Quote: “Real victories are those that protect human life, not those that result from its destruction emerge from its ashes,” by The late king Hussain of Jordan.
Favourite Hobby: Writing and cooking
Favourite Book: The Prophet by Gibran Khalil Gibran
The specs
Engine: Single front-axle electric motor
Power: 218hp
Torque: 330Nm
Transmission: Single-speed automatic
Max touring range: 402km (claimed)
Price: From Dh215,000 (estimate)
On sale: September
COMPANY PROFILE
Company name: Nomad Homes
Started: 2020
Founders: Helen Chen, Damien Drap, and Dan Piehler
Based: UAE and Europe
Industry: PropTech
Funds raised so far: $44m
Investors: Acrew Capital, 01 Advisors, HighSage Ventures, Abstract Ventures, Partech, Precursor Ventures, Potluck Ventures, Knollwood and several undisclosed hedge funds
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
The specs: Fenyr SuperSport
Price, base: Dh5.1 million
Engine: 3.8-litre twin-turbo flat-six
Transmission: Seven-speed automatic
Power: 800hp @ 7,100pm
Torque: 980Nm @ 4,000rpm
Fuel economy, combined: 13.5L / 100km
Abu Dhabi traffic facts
Drivers in Abu Dhabi spend 10 per cent longer in congested conditions than they would on a free-flowing road
The highest volume of traffic on the roads is found between 7am and 8am on a Sunday.
Travelling before 7am on a Sunday could save up to four hours per year on a 30-minute commute.
The day was the least congestion in Abu Dhabi in 2019 was Tuesday, August 13.
The highest levels of traffic were found on Sunday, November 10.
Drivers in Abu Dhabi lost 41 hours spent in traffic jams in rush hour during 2019
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
A Bad Moms Christmas
Dir: John Lucas and Scott Moore
Starring: Mila Kunis, Kathryn Hahn, Kristen Bell, Susan Sarandon, Christine Baranski, Cheryl Hines
Two stars
Grand slam winners since July 2003
Who has won major titles since Wimbledon 2003 when Roger Federer won his first grand slam
Roger Federer 19 (8 Wimbledon, 5 Australian Open, 5 US Open, 1 French Open)
Rafael Nadal 16 (10 French Open, 3 US Open, 2 Wimbledon, 1 Australian Open)
Novak Djokovic 12 (6 Australian Open, 3 Wimbledon, 2 US Open, 1 French Open)
Andy Murray 3 (2 Wimbledon, 1 US Open)
Stan Wawrinka 3 (1 Australian Open, 1 French Open, 1 US Open)
Andy Roddick 1 (1 US Open)
Gaston Gaudio 1 (1 French Open)
Marat Safin 1 (1 Australian Open)
Juan Martin del Potro 1 (1 US Open)
Marin Cilic 1 (1 US Open)
Generational responses to the pandemic
Devesh Mamtani from Century Financial believes the cash-hoarding tendency of each generation is influenced by what stage of the employment cycle they are in. He offers the following insights:
Baby boomers (those born before 1964): Owing to market uncertainty and the need to survive amid competition, many in this generation are looking for options to hoard more cash and increase their overall savings/investments towards risk-free assets.
Generation X (born between 1965 and 1980): Gen X is currently in its prime working years. With their personal and family finances taking a hit, Generation X is looking at multiple options, including taking out short-term loan facilities with competitive interest rates instead of dipping into their savings account.
Millennials (born between 1981 and 1996): This market situation is giving them a valuable lesson about investing early. Many millennials who had previously not saved or invested are looking to start doing so now.
The specs
Engine: 77kWh 2 motors
Power: 178bhp
Torque: 410Nm
Range: 402km
Price: Dh,150,000 (estimate)
On sale: TBC
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
The past winners
2009 - Sebastian Vettel (Red Bull)
2010 - Sebastian Vettel (Red Bull)
2011 - Lewis Hamilton (McLaren)
2012 - Kimi Raikkonen (Lotus)
2013 - Sebastian Vettel (Red Bull)
2014 - Lewis Hamilton (Mercedes)
2015 - Nico Rosberg (Mercedes)
2016 - Lewis Hamilton (Mercedes)
2017 - Valtteri Bottas (Mercedes)
The British in India: Three Centuries of Ambition and Experience
by David Gilmour
Allen Lane
If you go
Flying
Despite the extreme distance, flying to Fairbanks is relatively simple, requiring just one transfer in Seattle, which can be reached directly from Dubai with Emirates for Dh6,800 return.
Touring
Gondwana Ecotours’ seven-day Polar Bear Adventure starts in Fairbanks in central Alaska before visiting Kaktovik and Utqiarvik on the North Slope. Polar bear viewing is highly likely in Kaktovik, with up to five two-hour boat tours included. Prices start from Dh11,500 per person, with all local flights, meals and accommodation included; gondwanaecotours.com
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
RESULTS
Tottenham 1
Jan Vertonghen 13'
Norwich 1
Josip Drmic 78'
2-3 on penalties
KINGDOM OF THE PLANET OF THE APES
Director: Wes Ball
Starring: Owen Teague, Freya Allen, Kevin Durand
Rating: 3.5/5
THE BIO: Mohammed Ashiq Ali
Proudest achievement: “I came to a new country and started this shop”
Favourite TV programme: the news
Favourite place in Dubai: Al Fahidi. “They started the metro in 2009 and I didn’t take it yet.”
Family: six sons in Dubai and a daughter in Faisalabad
COMPANY PROFILE
Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends
The specs: 2018 Mercedes-Benz E 300 Cabriolet
Price, base / as tested: Dh275,250 / Dh328,465
Engine: 2.0-litre four-cylinder
Power: 245hp @ 5,500rpm
Torque: 370Nm @ 1,300rpm
Transmission: Nine-speed automatic
Fuel consumption, combined: 7.0L / 100km