What is the best way to get a mortgage without initial capitol?

[maximusprime]

Is it even possible? I know in the states sometimes you can talk your way into a 0% down mortgage but with the finance market here being relatively new from what I hear, I wonder if it can be done.

Basically, I am young, just getting started, havn't had a chance to save enough dough for a 15% downpayment, and throwing all my money away on rent isn't helping much. I need a way to own property and soon. Got a good job, good credit, good attitude, how can I make this happen?

 

[Roshan]

Is it even possible? I know in the states sometimes you can talk your way into a 0% down mortgage but with the finance market here being relatively new from what I hear, I wonder if it can be done.

Basically, I am young, just getting started, havn't had a chance to save enough dough for a 15% downpayment, and throwing all my money away on rent isn't helping much. I need a way to own property and soon. Got a good job, good credit, good attitude, how can I make this happen?

WOW, I like the spirit.

0% down payment will not be possible in USA anymore. You would be looking like 20 to 30% down after the sub prime crisis.

No money down as they call it is easy said than done here. You have to look at a minimum of 10% to put down.

The mortgage market in Dubai is opening up but 0% down payment looks far fetched.

Have you looked into the possibilities of an O.D as we discussed before, probably that could get you the money for the initial down payment. How about personal money lenders, they charge a bit high. How about International city. You could get something for Dhs 650,000 for a 1 BDR.

Visit a few banks, get to know how they handle cases like yours. Speak to mortgage advisers, agents. By just talking to them you can see avenues open. Start doing this and be assured you will have answers in 2 weeks time.

Regards

Roshan

 

[kennyhubbard]

I have see 97% mortgages on the table. This would generally require about 4% down(there is normally about a 1% processing fee).

A crowd by the name of Aseel finance from Abi Dhabi. Looks like they a new kid on the block.

Dubai properties had a 100% scheme about 18 months ago. I dunno how well that worked out and haven't seen it since.

More recently, there was an offer on JBR for 99% mortgage.

I guess you gonna have to wait and something may come up.

Rgds

Kenny

 

[maximusprime]

Thanks dudes,
I know I really should compromise but International city is a dump, and I have heard nothing but bad things from those who live there (poor construction, sewage stench, etc). It is so big and sprawling I can see it turning into a slum as Dubai matures, but that is just one mans opinion. I am looking for something a little more upscale, in the marina hopefully. JBR is what I am aiming for. Kenny, where did you see the 99% for JBR?

I looked into personal loans. I can qualify for the amount I need but my payments will be huge. Combined with the mortgage payment, car payment, girlfriend payment, I am afraid it could sink me. Basically there are too many things that have to go perfectly for it to work and if there is one thing I have learned about Dubai, its that nothing ever goes exactly according to plan. I am still investigating the buyers army as you and I discussed earlier roshan. I think it could work if I immediately refinance (how easy is it to refinance here by the way?). I am slowly getting people on board and going through the mortgage process so I can outline exactly what every person will need to have at the time of the deal so that there are as few hang ups as possible. I'll keep you posted, thanks for the advice.

Roshan, are you related in any way to Roshan Construction?
Thanks

 

[kennyhubbard]

Hi Maximus,

It was in the media, but about 6 months ago. I don't think it is available anymore......I was just using it as an example that these things do come along from time to time.

I agree that you should compromise......International City would be more than a compromise! I am sure you could find a nice place in a price range between international city and Marina. It is far easier to work your way up the ladder once you are on it........

Also remember that if you secure the right deal, mortgage payments would only start after you move into the apartment, so what you are spending on rent will probably more than cover the mortgage. Another suggestion using the personal loan.......borrow enough to cover the downpayment plus enough to make the personal loan repayments for the first 2 years. For example lets say you need 80 000 Dhs down, you would borrow 150 000 dhs. This would cover the downpayment(80k) and then you would have 70k left to pay the monthly personal loan repayment for 2 years. After 2 years you should be able to refinance enough to cover the personal loan or at least part of it. Your salary would also have gone up to help cover the loan, and you may even have paid off your car by then........

One thing is for sure......the property ladder will be no easier to get onto in a year's time, so you must do it now.

Rgds
Kenny

 

[esmerelda]

Thanks dudes,
I know I really should compromise but International city is a dump, and I have heard nothing but bad things from those who live there (poor construction, sewage stench, etc). It is so big and sprawling I can see it turning into a slum as Dubai matures, but that is just one mans opinion. I am looking for something a little more upscale, in the marina hopefully. JBR is what I am aiming for. Kenny, where did you see the 99% for JBR?

I looked into personal loans. I can qualify for the amount I need but my payments will be huge. Combined with the mortgage payment, car payment, girlfriend payment, I am afraid it could sink me. Basically there are too many things that have to go perfectly for it to work and if there is one thing I have learned about Dubai, its that nothing ever goes exactly according to plan. I am still investigating the buyers army as you and I discussed earlier roshan. I think it could work if I immediately refinance (how easy is it to refinance here by the way?). I am slowly getting people on board and going through the mortgage process so I can outline exactly what every person will need to have at the time of the deal so that there are as few hang ups as possible. I'll keep you posted, thanks for the advice.

Roshan, are you related in any way to Roshan Construction?
Thanks

I am stunned reading this thread!!! The credit crunch news obviously has not infiltrated Dubai! The fact that YOU would even consider 100% mortgage at this time & I can only put it down to the fact that you believe the Dubai hype that there is no bubble, Dubai will remain immune and prices will always go up so you can't lose! Well before you jump "dude" ...just check out the resale prices and trends. All too easy to get lost in the hype - especially if you are in the thick of it....just slow down & ask yourself do you really want to stretch yourself so much - with 95-100% financing the real estate market has only got to sneeze & you'll be in negative equity.

 

[kennyhubbard]

esmeralda,

I'm sorry, I disagree with you. People in Dubai are aware of the credit crisis, but Dubai is relatively unaffected by it.

A dip in the market affects everybody badly. The fact is I would rather be in negative equity with the banks money, rather than my own. I expect a far higher return for my cash than the 7.9% required by the bank.

Maximus is looking for a place to live? Are you seriously suggesting that he continue renting? Even if he goes into negative equity, as the end user, he will be unaffected by re-sale prices. The rental that he is paying is a reality and that will not change in the coming years.

With the shortages of labour, building materials, I think we have an accomodation crisis looming. Bubble......? I don't think so.

 

[esmerelda]

esmeralda,

I'm sorry, I disagree with you. People in Dubai are aware of the credit crisis, but Dubai is relatively unaffected by it.

A dip in the market affects everybody badly. The fact is I would rather be in negative equity with the banks money, rather than my own. I expect a far higher return for my cash than the 7.9% required by the bank.

Maximus is looking for a place to live? Are you seriously suggesting that he continue renting? Even if he goes into negative equity, as the end user, he will be unaffected by re-sale prices. The rental that he is paying is a reality and that will not change in the coming years.

With the shortages of labour, building materials, I think we have an accomodation crisis looming. Bubble......? I don't think so.

Then we will have to agree to disagree...your arguements have merit but not given the situation he is in - with no equity at all, potentially high repayments as a consequence. & the prospect of higher interest rates in the near future.
He will be impacted by resale price unless he plans to spend the rest of his days in Dubai..(& he seems a little young to be making that kind of decision!) Property is an illiquid asset which he may well find out in future.
I confess I am at a loss to understand your point about negative equity - surely the point is that if you have to sell because you can't keep up the payments OR need to move elsewhere, & your house is worth less than the debt - then you have to stump up the difference or declare an IVA (bankruptcy-lite).
As for Dubai...well it is already starting to receive adverse comments regarding it's infrastructure on this & other forums...& some smart money has already moved on.
Hence my comments.

 

[kennyhubbard]

Ok, lets agree to disagree,

Just for clarity, I would like to explain my point about negative equity not being an issue.

As you quite correctly say, if you sell the property for less than you owe, then you have to cough up the shortfall. As a matter of interest, I don't think you can declare bankruptcy in Dubai. You either pay up or go to jail.

The fact is when you take a 90% mortgage, all you are doing is coughing up in advance. The difference is that with the coughing up when I sell, is that I have the use of my equity for longer at a higher return than what I pay the bank interest on.

Essentially, the situation is 2 sides of the same coin. You view the lower % morgage as safe and I view it as wastefull because of the lost opportunity cost.

I don't know if you have been following the debate on property rental in Dubai. The fact is that he will be paying more in rent than in mortgage payments within a year.

I know you think interest rates will go up, but I have my doubts. The goverment in Dubai will not admit that it has an inflation problem. Governments use rates as a tool to tame inflation and Dubai is a cash driven society so the effect of rates will be negligible on inflation. They would be far better off depegging the Dirham for the dollar before they increase rates.

 

[maximusprime]

Esmerelda,
First, I am fully aware of the credit cruch, Im from the good ol USA where the whole mess began. Second I agree that dubai is inflated but if I crunch the numbers, I am losing huge amounts of money by renting. Also, in a few years after the talked about huge surge in supply blows over, I'll still be better off than I would have been were I renting the whole time. By no means do I plan to spend the rest of my days here but I will spend at least a couple years. Third, JBR is the place I want and the place I will get. The reason is that it is the only beachfront property in dubai giving it tourism appeal. I really dont think you can go wrong with an ocean view though I am no expert. I watch the marina getting better and better every day. JBR will be a very trendy place for the younger expat crowd in a few years. Its close to the bars, its on the beach, its got shops and malls, soon to be convienient to the red line. I dont see how it can go wrong, its a great deal. I am betting that JBR will be the least affected by the comming supply surge if it even happens. In the mean time, I am watching grass and flowers being planted, shops opening up, people hanging out and jogging, the whole place is turning into a decent place to live. I am doing my homework, believe me. I also have found 95% financing on the place which makes me think the bank feels fairly confident as well. I do appreciate your concern and your input is well recieved, keep responding
Max

 

[LaCasta]

Has anyone worked with a good lender that has provided financing for a resale? I will probbably buy something in BB on resale, but if I could get financing on a unit, it would obviously help.

 

[Roshan]

I have see 97% mortgages on the table. This would generally require about 4% down(there is normally about a 1% processing fee).

A crowd by the name of Aseel finance from Abi Dhabi. Looks like they a new kid on the block.

Dubai properties had a 100% scheme about 18 months ago. I dunno how well that worked out and haven't seen it since.

More recently, there was an offer on JBR for 99% mortgage.

I guess you gonna have to wait and something may come up.

Rgds

Kenny

Dubai properties had a 100% scheme on a few of the executive towers in BB.

JBR offered 99% only to lure investors into buying.

How easy is it to pay 1% to sign the papers. But just think how difficult it is to service the 99% mortgage. Little do we realize the interest accrued on the 99% during the construction period. It would work out to almost Dhs 60,000 per million for one year. If the project is delayed, the bank will still charge you and not the developer. One should be looking at paying an interest of Dhs 120,000 on each million for a 2 year period. Don't pay, you don't get the keys. Putting Dhs 120,000 towards interest is not easy.

Buying should be a good balance between putting money down and leveraging.

Regards

Roshan

 

[Roshan]

Thanks dudes,
I know I really should compromise but International city is a dump, and I have heard nothing but bad things from those who live there (poor construction, sewage stench, etc). It is so big and sprawling I can see it turning into a slum as Dubai matures, but that is just one mans opinion. I am looking for something a little more upscale, in the marina hopefully. JBR is what I am aiming for. Kenny, where did you see the 99% for JBR?

I looked into personal loans. I can qualify for the amount I need but my payments will be huge. Combined with the mortgage payment, car payment, girlfriend payment, I am afraid it could sink me. Basically there are too many things that have to go perfectly for it to work and if there is one thing I have learned about Dubai, its that nothing ever goes exactly according to plan. I am still investigating the buyers army as you and I discussed earlier roshan. I think it could work if I immediately refinance (how easy is it to refinance here by the way?). I am slowly getting people on board and going through the mortgage process so I can outline exactly what every person will need to have at the time of the deal so that there are as few hang ups as possible. I'll keep you posted, thanks for the advice.

Roshan, are you related in any way to Roshan Construction?
Thanks

Easy way out is to approach a mortgage adviser who has connections with all banks and they will be able to advise you FOC.

Buyers army sounds good, but takes a lot of patience and hard work to have an understanding with so many investors. The bottom line is you will all buy together and each one will have his own exit strategy.

I am not the owner of Roshan constructions, people ask me that question always. I wish I was, I would be busy buying properties and might not have found time to post LOL.

Regards

Roshan

 

[iloilo]

Dubai properties had a 100% scheme on a few of the executive towers in BB.

JBR offered 99% only to lure investors into buying.

How easy is it to pay 1% to sign the papers. But just think how difficult it is to service the 99% mortgage. Little do we realize the interest accrued on the 99% during the construction period. It would work out to almost Dhs 60,000 per million for one year. If the project is delayed, the bank will still charge you and not the developer. One should be looking at paying an interest of Dhs 120,000 on each million for a 2 year period. Don't pay, you don't get the keys. Putting Dhs 120,000 towards interest is not easy.

Buying should be a good balance between putting money down and leveraging.

Regards

Roshan

There are many factors that the credit approvers of mortgage banks (in Dubai) cross out before they qualify you for that tempting 99% or so-advertised 100% mortgage offer. I was told by the developer that I would get the 85% loan-to-value mortgage by NBD but when my papers were actually submitted, NBD offered me only upto 70% max. So beware! one must first get the pre-approval in writing by the mortgaging bank & then look out for projects that is being financed by that particular bank. Known Banks don't finance just about any project on the horizon.

 

[jags]

hi there

is there any mortgage product called buy to let(rent)? is there any chance of refinancing completed n rented out property for non resident who is not working but lives on rental income? i have heard that Marina Diamond can not be financed. is it true?

thanks

 

[Roshan]

There are many factors that the credit approvers of mortgage banks (in Dubai) cross out before they qualify you for that tempting 99% or so-advertised 100% mortgage offer. I was told by the developer that I would get the 85% loan-to-value mortgage by NBD but when my papers were actually submitted, NBD offered me only upto 70% max. So beware! one must first get the pre-approval in writing by the mortgaging bank & then look out for projects that is being financed by that particular bank. Known Banks don't finance just about any project on the horizon.

Always get a pre approval so that you know how much you are getting and how much you have to stretch on personal finances.

Regards

Roshan