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Abu Dhabi Mortgage Advice Required!

Abu Dhabi Mortgage Advice Required!

Old Jan 28th 2008, 9:15 pm
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Arrow Abu Dhabi Mortgage Advice Required!

Hi All,

I'm a newbie to not only forums but will also be new to Abu Dhabi within 4 weeks or so. I'm conscious that I will have to rent for some time but I have the aim of buying a property in the city as soon as possible.

Up until now, I've been unable to find the right answers to my questions and I'm hoping you experienced expats can help. I'm basically trying to get a handle on what I can roughly expect to be granted with regards to a mortgage in relation to my salary.

As many of you will be familiar, the 2 rules of thumb in the UK is a bank will loan you 3.5-4x (sometimes more if you know someone) your salary or you should be dedicating 33% to payments towards a property.

Naturally, there's a difference because I'll be earning a tax free income. I might be able to explain my logic better with some equations and perhaps you guys can tell me if I'm way off or not.

Using a 4x salary amount, here's what I could afford in the UK.

Down Payment = £30,000
Salary = £33,750
Salary x 4 = £135,000
Loan + Down Payment = £165,000

In actuality, I'm netting £23,460 after tax and nat. ins., so technically, the mortgage I can afford in terms of my net salary =

£135,000 / £23,460 = 5.75x available net income.

Are you with me? Now, having decided to move to the UAE I'm getting a big salary bump and obviously the tax free benefits. Here are my new assumptions based on those of the UK

Down Payment £30,000 (or Dhs equiv.)
Salary = £47,000
Salary x 5.75 i.e. available net income = £270,250
Loan + Down Payment = £300,250

I know the UAE require home insurance and registration or whatever but is my thinking way off here or is this reasonable??

To reiterate, I'm going to be on £47,000/year in the UAE so what is the upper boundary of mortgage value available to me in your opinions???

I very much look forward to any discussion that continues from this.
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Old Jan 29th 2008, 4:23 am
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Default Re: Abu Dhabi Mortgage Advice Required!

pretty sure that the only freehold available to foreigners is in the Al raha beach development and the new Yas island etc...

Dont think there are any freehold available ready to move in actually on Island....

I have just moved to AD so am just sussing out all the pro's/con's
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Old Jan 29th 2008, 5:25 am
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Default Re: Abu Dhabi Mortgage Advice Required!

Thanks for the reply. There's actually a lot more developments in the works that I doubt you'll be aware of. Fortunately I work in the construction industry and get to hear the rumour mill spin. But beyond the two you mention, the other well known developments include:

Saadiyat Island
Reem Island
The Gate District (incl. The Sky Tower: tallest building in Abu Dhabi).

I know a decent amount about the developments going on in Abu Dhabi...I just don't know much about what kind of mortgage will be available.

Any help guys and girls?
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Old Jan 29th 2008, 9:33 am
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send a PM to Meow - she is an IFA and gives mortgage advice
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Old Jan 29th 2008, 9:43 am
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Default Re: Abu Dhabi Mortgage Advice Required!

Thanks, Blue Cat! Will do.
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Old Jan 29th 2008, 9:46 am
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Originally Posted by ImAsKinG View Post
Thanks, Blue Cat! Will do.
she is actually in the UK at the minute, so it might be a few days before she gets back to you but she will definately be able to help you.
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Old Jan 29th 2008, 12:10 pm
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Default Re: Abu Dhabi Mortgage Advice Required!

Originally Posted by ImAsKinG View Post
Thanks for the reply. There's actually a lot more developments in the works that I doubt you'll be aware of.

Saadiyat Island
Reem Island
The Gate District (incl. The Sky Tower: tallest building in Abu Dhabi).
They were part of my 'etc' I am aware of them as i too am keeping an eye on developments in AD
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Old Jan 29th 2008, 4:06 pm
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Default Re: Abu Dhabi Mortgage Advice Required!

I have your PM, but as Blue Cat says I am in the UK (on business) at the moment. A few points:

1. I wonder if it is wise to buy very quickly without really getting to know a place. You need to know that you want to stay.

2. You will need to have been in your job for a while (& be on a permanent contract) before lenders will consider you a good risk.

3. Generally the maximum income multiple across the UAE is five times salary, less other commitments.

4. You will need a depoait of at least 10% of the purchase price.

5. The mortgage market in the UAE is very different to the UK (and more restrictive in AD then in Dubai). Lenders will only consider certain developments so that may restrict your options.
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Old Jan 29th 2008, 5:50 pm
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Default Re: Abu Dhabi Mortgage Advice Required!

Originally Posted by ImAsKinG View Post
Hi All,


I very much look forward to any discussion that continues from this.
If you are already with a British Bank that has facilities in Abu Dhabi that would be a help. For example, I banked with a British bank and found its a relatively simple step to get a mortgage with one of its international branches in Dubai. Note though I had to buy an Emaar property as they do not cover Damac properties (which was my first choice). So you need to check with different banks and which property developments they lend on.

I found that some banks would not lend until you had been here for about a year and have shown regular monthly earnings. so it is worth checking this out very early. However, this may have changed since 2006. I had to show references either from an employer or in my case the last three years of company accounts in the country you are coming from (as I have my own company).

I do not think the banks ask for home insurance, as they ask you to take out a life insurance policy on the mortgage. Mine is about DHS 1,100 a month for a Dirhams (DHS) 1.44 million mortgage payable over 9 years on a 2-bedroom flat.

Other upfront fees include for example:

Developer registration fee (about DHS 3,000).
Developer transfer fee (DHS 20,000 - as I bought from an existing owner)
Estate agent fees (DHS 40,000)
Mortgage cancellation fee (developer fee - DHS 1,000)
Health and fitness (treadmill) tests for mortgage insurance (DHS 1,200).
You will also require a combined deposit for electricity, water and sewerage (about DHS 2,000)

A new fee coming in in Dubai (not sure about Abu Dhabi - you need to check) is property registration:
Projects completed after 17/12/2006 - 1% of contract price plus DHS 300
or
Mortgaged properties - 0.25% of the original mortgage value plus DHS 10.

Ongoing fees:
Obviously your monthly mortgage payments (e.g., DHS 19,000 month in early years)
Property maintenance fees (about DHS 18,000 per year).
Mortgage life insurance (DHS 1,100 month for non-smoker, and twice that for smokers).

Also I knew I was going to buy straight away, but searching good places to live, finding a suitable property and trying to get a mortgage from various banks took me three months. I had to find accommodation for these two months. This was expensive as very short term lets are expensive (DHS 15,000 to DHS 20,000 per month.

Hope the above gives some indications of one-off and ongoing fees.

While it can be trying and frustrating, in the end you settle down and it's all a memory. Now you are at home and it feels like home.
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Old Jan 29th 2008, 5:54 pm
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Default Re: Abu Dhabi Mortgage Advice Required!

Originally Posted by ImAsKinG View Post
Thanks for the reply. There's actually a lot more developments in the works that I doubt you'll be aware of. Fortunately I work in the construction industry and get to hear the rumour mill spin. But beyond the two you mention, the other well known developments include:

Saadiyat Island
Reem Island
The Gate District (incl. The Sky Tower: tallest building in Abu Dhabi).

I know a decent amount about the developments going on in Abu Dhabi...I just don't know much about what kind of mortgage will be available.

Any help guys and girls?

The Gate: Sky Tower:1 bed,seaview 934sq feet: circa £210k-sterling(Amlak)

Empire Tower ADNB.


Google Etihad Tower.Off the Corniche and stunning.
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Old Feb 3rd 2008, 7:19 am
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Default Re: Abu Dhabi Mortgage Advice Required!

Thanks guys. Sorry I've been away. I'll read everything and take it under review.
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Old Feb 3rd 2008, 8:28 am
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Default Re: Abu Dhabi Mortgage Advice Required!

Originally Posted by ImAsKinG View Post
Thanks guys. Sorry I've been away. I'll read everything and take it under review.
Meow is back now if you need to speak to her
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