1. Are there any specific things to look out for before deciding on which Mortgage Provider? What advice would you give? Any tips? :- The mortgage market in Dubai is still in its infancy so don't expect to have the wide amount of choice that you have elsewhere in the world.  The lenders you have available to you are determined by the development you are looking to buy.  Larger developers such as Emaar or Nakheel will leave you with a wide choice of lenders.  On the other hand, in the case of the smaller, private developers you may have no lenders to choose from at all.  We have come across this problem many times and sadly people are left high and dry after paying a deposit on a property only to find subsequently that they can't obtain a mortgage.  In order to avoid such costly mistakes, it is invaluable to seek advice from an independent mortgage borker such a s Globaleye.

It is always worth reading the small print when you look at a mortgage and this is where we at Globaleye can really andd value.  For example, a lender may advertise what looks like an attractive interest rate but when you add on the extra charges, such as the mandatory life insurance, buildings and contents insurance, processing fees, valuation fees, registration fees, wear and tear on your vehicle delivering numerous documents and the cost on your stress levels, the deal may not be as attractive as you first thought! Using an experienced mortgage borker like Globaleye is essential to ensure you get the right deal.  A little extra money spent up front can save you much larger sums longer term.

2. Which is, in your opinion, a better choice to the Property Buyers, an Islamic Mortgage (Ijara/Murabaha) or a Conventional Mortgage? What is the difference?:-  Let's first explain what an Islamic mortgage is.  The origins of an Islamic mortgage stem from the Holy Quran. Simply put, it prohibits all sources of unjustified enrichment.  One significant aspect is the prohibition on charging interest for the use of money - the profit charged on money is calculated by profit actually generated, in other words not pre-determined or guaranteed.  Under a conventional mortgage, the lender charges interest on the finance that they lend you to purchase a property.  In most cases you pay a proportion of the capital and interest on a monthly basis.

So how does an Islamic loan differ if you can't charge interest? There are two main structures, Murabaha and Ijara.  The Murabaha method is where the lender buys the property and than sells it to you with a profit.  You pay the amount back in monthly installments at a fixed amount.  Ijara works in a similar way, where the lender again buys the property you want, and then leases it to you for a specified term.  The monthly figure is therefore a rental figure which can be adjusted periodically, in line with leasing rates.  After the term - when all the payments are up to date - the property is transferred to you.  Under both types it is worth noting that you may be liable for charing - not only in the first instance of the purchase, but also at the end when it is transferred to you. Tamweel and Amlak offer Sariah compliant mortgages.  Other banks use conventional mortgages at the moment.

In terms of what is best for you, well at the end of the day it doesn't make too much difference.  The property ownership is the main factor.  Let's say you take an Ijara mortgage - the property is owned by the lender who leases it back to you for a set period and when the lease is finished, the property becomes yours.  If you had a 15 year term and you got to year 14 and could no longer make the repayments, you could end up losing everything.  A standard mortgage would allow for repossession where the lender can sell the property to recover the debt and you then get what's left over.  This is not the case with Ijara where you could potentially lose everthing.     

3. What are the questions that the Property Buyers should ask to find out all the hiding costs of a Mortgage?  What are your recommendations? :- There are number of costs involved in obtaining a mortgage with a lender in Dubai and that's before you even look at interest rates.  They key areas to look out for are:

• Insurances - are they mandatory and what will they cost?
• Processing Fees - how much, and is it refundable?
• Valuation fees by a surveyor - do you get to choose your surveyor?
• Early settlement penalties - we'd all love to pay off the mortgage early but how much will it cost?
• Interest Rates - fixed or variable?
• Is the Loan to Value (LTV) available based upon market value or independent valuation? (Bear in mind that independent valuations can come in around 10% lower than market value).
• Is it mandatory to make mortgage payments from a specific bank in Dubai? (most lenders stipulate that you must have an account with their favoured bank).
• Can I move my mortgage to another lender if I find a better offer?

4. What kind of support does your Globaleye provide? :- Obtaining a mortgage (the right mortgage!) in Dubai is not an easy process and can be fraught with pitfalls.  We will provide advice and guidance on the best mortgage options available given your circumtances.  We will collate and present the documentation for the application with whichever lender is chosen.  This is crucial as you only get one chace with the application.  If your application is rejected for any reason, it is very rate that they will reconsider.  As we work directly with the credit managers.  We know exactly what they will be looking for and can ensure the documentation is presented in the most favorable way. We would not submit an application unless we felt confident that it would be approved.  This can save you significant costs.

PLUS, we look at potential finance option overseas too thereby being able to arrange 100% finance for some clients.  For example, if a local lender only offers you 60% LTV and you do not have sufficient savings to find the other 40% deposit, then the local lender cannot offer you a loan. If, however, we analyze your overall financial position and determine that you have assets elsewhere, we can arrange finance with international lenders to source the 40% you require.  We can do that - local lenders do not.

In summary, Globaleye assist property purchasers through the entire process of raising finance by finding the most suitable mortgage available to meet their requirements and in turn helping them to avoid the many pitfalls present in the fledgling Dubai Mortgage market.

5. What are the conditions for an international investor - a non-UAE resident - to apply for a Mortgage in order to buy a freehold property in the UAE? :-  Typically, if you are non-resident in the UAE, you can expect to get a lower LTV and a shorter mortgage term.  As a non-resident, if you work on the assumption that you will need to pay a 20% down-payment on the property and the mortgage term will be no more than 20 years at 8.5%, you won't go too far wrong.

If you are applying for the mortgage from overseas then although the lender may tell you that you are not required to be in Dubai in person to sign the applications etc, they may stipulate that you required a bank account with specific bank.  The bank will require you to be in Dubai in person to open the account and also to sign for acceptance of the mortgage offer.  So be prepared to buy a plane ticket and visit Dubai....mind you, if you are buying a property here, if would be advisable to take a trip here and see it anyway! 

6. In your opinion, will mortgages be available to all freehold properties offered in the UAE? :- In the full ness of time, we would expect that it will be possible to obtain a mortgage on any freehold property in Dubai but the big question is how long will this take? Always work  on the worst case scenario and you won't be disappointed.  And work on the assumption that the lenders will continue to be specific about where they will or won't lend for some time to come.  In summary, do your homework before committing to purchase.  Or even better, let Globaleye do it for you!

7. With the introduction of Law no.7, will a Poperty Buyer be able to get a Mortgage from his/her country of origin?:- At the moment, the answer is no.  There is still far too much uncertainty and it is still regarded as a high risk by the international lenders.  In the fullness of time, and with the introduction of full title deeds and a land registry, this may change but the speculative nature of the property market in Dubai is still a deferrent to the international lenders.

8. What general observations do you have about the Mortgage sector in the UAE? Is there anything elese you would like to add about the market or your organization? :- In the early days of mortgages in UAE, the lenders were generally very inflexible, very strict on their lending critieria and extremly risk averse.  this is hardly surprising when you consider that they had an abudance of customers coming through their doors every day and there was no need to be competitive and/or customer friendly! We have seen this attitude start to change in recent months and the criteria is becoming a little more relaxed, customer focus is improving and administration is quicker.  Hopefully with the arrival of new lenders in the market, whether locally or from abroad, this competition will only benefit the consumer considerably.  We would also like to see the use of offshore companies with Lenders based here.  Many property investors around the world use such structures for a wide range of reasons.  In Dubai, many investors use offshore comapnies to make their purchase Sharia friendly, to circumvent transfer fees and to mitigate taxes they could be liable for back home.  Many investors from Europe, Australia and North America forget they can be liable to Capital Gains or indeed Death taxes in Dubai.  We assist investors with structuring their property portfolio to protect it now and in the event of their demise ensuring that it passes to their beneficiaries as quickly as possible (Globaleye also provide a will writing service).  At present there is reluctance from local lenders to incorporate the use of offshore structures; we hope they will later this stance in future.

About Globaleye : - Globaleye are an independent firmof advisors who provide unbiased business solutions to both Corporate and Private Clients.  Our expertise in international finance planning has made us the first choice for over 3500 clients worldwide from our office in Dubai.  Our Consultants are qualified and trained to international standards as determined by the CII (Chartered Insurance Insititue) and hold FAIQ (formerly ICFA) accreditation.  This ensures our clients are provided with the best advice and service at all levels. 

Since the Company is independent, no Bank, Life or Investment company influences us on the solutions we offer.  This provides added value for our clients and a truly unbiased approach in creating tailored financial solutions.  Seeking a bespoke service to match your needs should be your prime consideration and one that we can deliver.

A member of the Al Maktoum ruling family sponsors the Company in Dubai and the Ministry of Economy of the UAE and the Economic Department of Dubai provide our licenses.  Furthermore, we hold Dhs 1.5m of professional indemnity insurance and follow the guidelines laid down by the EU money laundering regulations.  Since we have terms with some of the largest financial institutions in the world, our due diligence and procedures have to be of the very highest level.

We have become the forerunner in the Gulf region by being innovative and maintaining a client focused approached.  Our advisors maintain an ongoing relationship with our clients as their financial strategy develops and changes in their life cycle occurs.  we have introduced online services and our Glbaleye Bulletin Service (GBS) has proved invaluable to our subscribers in that it keeps them abreast of developments that affect investors.  Similarly, our Globaleye Portfolio Service (GPS) provides a monthly report on the progress of your financial plans delivered straight to your inbox.  These services coupled with ongoing global market commentaries, seminars and a concise library of financial products, serves to keep our clients abreast of economic developments that could affect their financial planning.