Wednesday, 12 March 2008

Dubai Mortgage & Property Financing

Amlak Finance

Originally established in 2000, Amlak was the first to offer mortgages in the UAE. The company was conceived to provide longer-term financing to Emaar customers, unable to meet more traditional short term mortgage payment schedules. “The recent announcement of the freehold ownership for expatriates has further boosted investor confidence in Dubai's real estate sector and sparked growth in the uptake of mortgage products offered by Amlak Finance. In line with this, we at Amlak Finance have created a truly value-packed offer at very competitive interest rates," said the general manager of Amlak Finance.

Amlak announces 25-year mortgage: Amlak Finance, announced a new home financing scheme in which UAE nationals as well as foreign investors can take advantage of 90 per cent finance of the property value with a maximum of 25 years. The maximum loan per individual has been capped at Dh 5 million. In addition, the maximum debt service coverage ratio (ie, the monthly mortgage payment) is 55 per cent of your monthly salary; and you also have to have been in full-time employment in the UAE, with the same employer, for a minimum of three years. Although Amlak naturally complements Emaar’s business by providing prospective homeowners with long-term financing, it will provide mortgages to a wide range of developers.

Tamweel Home Finance

Upto 70% Finance Arranged
Tamweel brings together the legacy of two great organizations - Dubai Islamic Bank, the first Islamic Bank in the world, and Istithmar, which is part of the corporate group (including the Dubai Ports, Customs and Free Zone Corporation, Nakheel, Dubai Metals and Commodities Centre and Tejari), and is one of the fastest growing real estate developers, with a dominant presence in trade and commerce in the region. Tamweel aim to be the most admired leader amongst finance companies in the UAE.

In essence, Tamweel are a blend of financial stability and ethics, a fusion of traditional values and progressive outlook, providing world class service, cutting edge technology and unparalleled professionalism. Tamweel are a one billion dirham company dedicated exclusively to the provision of home finance.

Dubai Islamic bank
The Dubai Islamic Bank that functions on the principles of the Islamic finance techniques, buys the property on behalf of the customer and is the legal owner of the property. The customer will then lease it from Dubai Islamic Bank for a period mutually agreed upon and on complete repayment of the loan, the transfer of the property to the name of the owner is then effected.
Here the mortgage technique is not used, but a contract referred to as ‘Ijara’ that is very similar to the conventional leasing is applied. Since the project that they finance is in the name of the bank till complete repayment of the loan amount, they eliminate the risk factor totally.

Other local and foreign banks have stepped into the Dubai property mortgage / finance market, like Barclays and HSBC bank, and more are expected over time.