I bought a hotel apartment at Business Bay. Currently, it’s an off plan project and the handover is in 2019. The SPA is being stamped by the developer. I paid Registration fees and 30 percent of the flat amount. Can I know my options to finance remaining amount?  

Certainly, the finance options are there in the market to fund a hotel apartment. However, as you mentioned that property is currently under construction and the completion date is in 2019, in that case, you need to invest initial 50 percent of the property value and thereafter you will be eligible for the remaining 50 percent of the bank finance.

As per the guiding principle of the UAE Central Bank, the maximum loan to value for off plan funding is the 50 percent regardless of purpose, value or category of the buyer. Currently, developers are doing an exclusive affiliation with the bank to facilitate the customer’s finance need.  Moreover, if the project is listed with the master developer, the banks could fund the development.

In UAE, to understand the buyer’s eligibility, the lender tends to look at the income level of the buyer, ability to pay the installments, financial exposure to other lenders along with the property documents, so it is important to have all essential documents organized to qualify the lender’s benchmark.

What is your advice to those who are looking to invest in Dubai?

Dubai real estate market has been in expansion and stabilization mode over recent years. Moreover, the execution of several mechanisms designed to support developers, tenants and landlords create strong affirmative sentiments among investors and the end-user, which apparently position Dubai as an affordable place to live and work.

Furthermore, if looking to invest in Dubai, the essential first step is to identify the long-term perspective; you want the property for self-use or want to have the rental yield. Check the finance option- plan the budget within your comfortable zone. Browse your preferences and take guidance from the industry expert to avoid any pitfall.

Currently, the market is fueled by a great deal of new inventory hence the investor has to be vigilant while selecting the one, so that you can achieve the goal of investment. Considering an off plan can bring in more capital appreciation in the long-term with higher yield, whereas, the ready property could fetch an immediate return on the investment. In Dubai, the rentals are still attractive with the stable sale price, which gives privilege to more end-users to enter the market with larger saving outlook. However, an investor must weigh in both the options to carry out an informed decision.

I recently bought a villa in Ajman; the project is ready for handover. Can I acquire the finance to do the final developer payment along with some equity amount to furnish my villa?

Certainly, you can avail the finance for developer payment and the equity amount. But there is a handful of the lender in the market, who will be financing the Ajman property or any other property outside Dubai and Abu Dhabi. Ideally, you could employ an independent mortgage consultant to provide the required information and process the case with target bank. As they will have a clear idea which bank would be keen to finance the said project and if the buyer’s profile fits in the bank’s pre-defined criteria.

Since the project is already completed and ready for processing, the banks would be keen to fund the project based on the buyer’s eligibility criteria. The bank would avid to review handover letter and completion certificate from the developer, buyer’s income profile, sale and purchase agreement, payment plan and the copy of the land department fee to calculate the loan amount.

Initially, the bank will do the developer’s payment and once the title deed is ready the bank will release the equity amount, which could be utilized in any form.

I am planning to move to Dubai this summer for 2 – 3 years depending on how the job goes. Earlier, I was looking at the rent structure and they are way too high. So I was thinking to invest the rent amount into buying the property. Is that possible for me? What would you advise me on this?

Well, at the present state this is the imperative resolution you need to decide on and how you want to take it. Also, considering that rental overhead is holding high in few protuberant areas in Dubai hence your decision needs to be calculative while planning your purchase.

However, since you stated that you are moving to Dubai due to the job change, then, in that case, you might need to hold the buying decision for minimum 6 month to qualify for the finance as a resident of the UAE. You can certainly, keep an eye on your options and can calculate your affordability. But if you are keen to start the process immediately, you can apply as a non-UAE resident and can present your income profile along with the residential status from the residing country. Currently, the lenders have lucrative product for non-UAE resident to invite international buyers. The rates for non-UAE resident starts from 4.49 percent and the loan to value could be up to 75 percent of the purchase price.

I have a ready cash buyer who is willing to take my mortgaged property. I am not sure if I can sell my property even if I haven’t completed my mortgage payments.  Can you guide if I can accept the offer and do I have some options?

Indeed, you can accept the offer, and can absolutely sell your property if you have upright market value for your property. If the buyer is ready to handover the deposit cheque you can sign the Form F and the buyer will give you the outstanding amount cheques as well, which you can deposit in the bank and settle down the loan account. Thereafter, with the release documents, both parties should approach developer’s office to apply for the NOC and execute the transfer in the land department and the difference amount will be given to the seller if any, from the property sale price.

To check the outstanding amount on the mortgage, the seller can request a liability letter from the bank to identify the exact amount and accordingly can notify the same with the buyer. Here, the point to remember is that few banks have early payment fee attached to it and even some have zero fees in case of selling the property. So inform the bank accordingly and carefully settle the loan account.

Read the complete Article Published in Gulf News Freehold May 2017 Edition