The Dubai property market has grown beyond all expectations and continues to boom. Now, the demand for property in Abu Dhabi, Ras al Khaimah, and the other Emirates is reaching similar proportions. The huge demand for property across the Emirates has created a sellers market in which buyers have to move fast to avoid disappointment.

This often results in the buyer missing out on the most suitable lending package because they are rushed into the first scheme they are offered so they do not miss the opportunity.

Many think that they can do the research before they start searching  for a property but, unless they are adamant on buying on one development, this is not always possible because different lenders lend on different developments; and sometimes only on certain properties in those developments!

Often, those who do know where they are going to buy still fall foul. Unless they have knowledge of the cost of the entire package upfront (including the mortgage repayments, life assurance premiums, and the lenders fees) and the lenders service standards, they often lose the property as they cannot arrange the finance in time or end up paying much more than they need to.

This can be easily shown through a couple of common scenarios:

Scenario 1

Mr. A is looking to buy an apartment on the Palm for AED 3,000,000. He has done some basic research and has found that Dubai Mortgage Lender offers up to 90% at the same interest rate that all other lenders only lend up to 85% on. Even though he can afford a 15% down-payment, the higher loan amount makes this mortgage much more attractive than the other lenders he has looked at as he will have more money to furnish and decorate the apartment.

However, Mr. A has not considered the service standards of the lender. Unbeknown to the Mr. A, this banks service standards are notoriously poor and they take twice as long as the most efficient lenders in even the most straightforward of cases. To compound the borrowers problems, the bank employs much more stringent underwriting requirements because they are lending a higher percentage of the property value than the market average.

After, six weeks of frustration, the seller pulls out of the deal and the buyer loses the property. He ends up purchasing a similar property for AED 3,200,000 with 85% finance as the market has risen in the time since his last attempt at purchasing - all because he had little experience of the UAE mortgage market.

At Candour Consultancy, we would have foreseen these difficulties, explained them to the customer and advised him to proceed with another lender who service standards we could be sure of; even though he would have to have put down a 85% deposit.

By not using an independent mortgage broker, the experience has cost Mr. A AED 27,000 in a wasted mortgage arrangement fee, AED 2,500 in a wasted valuation fee and AED 200,000 due to the increase in property prices - a total of AED 229,500 just because he did not use a mortgage specialist.

Scenario 2

Mr. & Mrs. B are purchasing  a villa at Arabian Ranches for AED 6,000,000. They can make a 20% down-payment. They too do some basic research and find Dubai Home Finance Company offer the cheapest mortgage rate - 6.5% compared with 6.99% from International Bank in Dubai.

Whilst both banks insist on life assurance being assigned to the loan, with Dubai Home Finance Company it is compulsory to use their partner companies whole of life policy for 125% of the loan amount plus permanent and total disability cover - this costs AED 3,530 per month.

International Bank in Dubai have no stipulation on which life assurance provider can be used and will accept a term assurance policy for 100% of the mortgage value. Candour Consultancy are aware of this and do the calculations:

The monthly mortgage repayments for Dubai Home Finance Company are AED  32,400 and the life assurance costs AED 3,530 per month. A total monthly repayment of AED 35,930.

Whilst the monthly mortgage repayment for International Bank in Dubai is higher at AED 33, 895, the term assurance Candour Consultancy source relatively cheap at AED 1,195 per month. This brings the total monthly outlay to AED 35,090 which saves the customer AED 840 per month and AED 252,000 over the 25 year term of the loan!

In both these scenarios, Candour Consultancy have saved the customer in the region of AED 250,000. We are an approved member of the Gulf Lenders Network and, as well as having access to nearly all the lenders in the UAE, we can offer completely impartial advice on life assurance, Wills and building & contents insurance.

Unlike other mortgage brokers in the UAE, our advice is completely free of charge when the life assurance is arranged through us. 

To speak with one of our independent mortgage advisers, just click the 'contact me' button below and provide us with your preferred contact details. Alternatively, please feel free to print off our mortgage questionnaire and fax or scan this back to us.