J
jackcze
New Member
While the UAE market was booming, lending institutions were more than happy to offer 90% or 95% finance. This changed dramatically in September/October 2008.
Suddenly lenders realised that the UAE market is capable crushing and reacted by tightening their policies. This, as much as anything else, contributed to the property price drop across the UAE, as people found it increasingly difficult to borrow.
Having said all that, it is still possible to obtain finance as long as it fits into lenders’ criteria. I have attempted to summarise some important points:
Suddenly lenders realised that the UAE market is capable crushing and reacted by tightening their policies. This, as much as anything else, contributed to the property price drop across the UAE, as people found it increasingly difficult to borrow.
Having said all that, it is still possible to obtain finance as long as it fits into lenders’ criteria. I have attempted to summarise some important points:
- The lenders prefer lending to residents of the UAE.
- For residents, the maximum lending ratio is approximately 85% for completed properties and 80% for under construction.
- For non-residents, the maximum lending ratio is 70%.
- The interest rates vary from about 8% to 9.5% for residents. Interest rates for non-residents start at around 9%.
- Certain industries are not acceptable including: real estate sales, property development, construction, hospitality and even banking in some cases.
- All existing finances must be squeaky clean because the lenders go through everything in great detail.
- Generally the only acceptable loan purposes are property purchase or refinance of existing debt. Equity release is generally not permitted.
