We can introduce you to companies that can assist you in arranging finance in Dubai. Most of the bank's offer 70% 'loan to original developer sale price' mortgages and the rates tend to range from 6 - 8%. The approval of the loan is dependant on the project your earnings. Normally banks will lend on "approved" projects. Those are ones that they have reviewed and signed an agreement with the developer to lend finance on. Some mortgage lenders will allow UAE nationals to borrow upto 90% on their total property value. Not all projects will be "approved". If the project were approved, then you would contact the relevant bank/finance company to arrange finance. If the project is not approved you may need to approach various banks to see if they will give you finance. If your ability to pay the on-going instalments is based on the finance being given, then we strongly advise that you obtain finance prior to committing yourself to any project, as most deposits are non-refundable. There are literally thousands of mortgage options. In the United Arab Emirates, however, the choice of lenders is not as widespread and the options not as attractive as those found internationally. At present, typically you can borrow at 6.5% in AE Dirhams for the various property developments that are regularly advertised in the local press. Banks based overseas cannot provide lending facilities on UAE properties directly so one is confined to the locally established lenders. This situation should change in the near future. Finance can be arranged through overseas lenders if you have assets overseas too. A number of property investors with assets overseas have taken advantage of favorable international interest rates. For example, someone with property in the UK may be able to release equity to a maximum of 80% of the value of their property (less any outstanding mortgage) to finance all or part of their property purchase in Dubai. One should be aware of the additional costs for arranging finance. Your bank may levy a fee and once again international lenders tend to offer very competitive terms. Valuation fees, Brokers Costs, Protection fees, legal/conveyance and in some cases planning permission can all add to the costs. If you do not have overseas property to obtain finance then another form of collateral could be an investment portfolio, which could be used as security to obtain a loan. If you do not have assets elsewhere then your options are limited to those offered by the lending terms of the local banks of the UAE.

Most lenders will require some form of protection for the loan. Banks on the whole do not like repossessing property and would prefer the loan to be repaid from an insurance policy should a serious event occur. Similarly, if you had to sell the property to pay the loan in the absence of a policy, the value of the property may have fallen to a level below the outstanding loan amount. With critical illness affecting 1 in 4 of us at some stage in our life, many lenders will require that you have sufficient protection to cover the amount of loan you have secured. Seeking the right insurance is key since it comes in many forms. Get the right advice to determine which one is right for you. Remember, if your loved one passes away unfortunately the bills do not go with them - avoid the financial trauma and have yourself correctly protected.

DIB is the first Islamic bank in the world and a driving force for change in the Islamic banking industry. With a wealth of tradition and heritage and a commitment to flexibility, innovation and modernity, we provide you with a comprehensive solution to all your financial needs. Established in 1975, Dubai Islamic Bank is the first Islamic bank to have successfully implemented the Islamic system of banking in all its shades. Help and encouragement came in from everywhere such as the government, people and the central bank of UAE.

As the leading provider of Real Estate Finance in the UAE, Dubai Islamic Bank plays a major role in supporting infrastructure and real estate developments, ranging from construction of road networks and bridges to the construction of commercial property, residential estates and multi-storey buildings. In order to further enhance its role of offering total banking and finance solutions and meet the emerging challenges in the real estate industry, a new structure has been established that includes Contracting Finance and Real Estate Finance.

The Real Estate Finance unit is managed by a specialized team with extensive experience in the field. The team provides advisory services, , project funding and new product development tailored to meet customer needs. Support is being extended by an operations unit (Real Estate and Investments Operations), which undertakes documentation preparation and execution, processing of transactions and responding to subsequent customer queries. Due to the nature of business, an engineering unit (Technical Supervision) provides technical advice, property evaluation and supervision on projects, either financed or invested in by the Bank.

The new unit set up early this year to undertake contractors' finance has made an excellent start. Convenient structures for credit facilities have been finalized. Shariah approval was obtained and operating procedures are in place to provide the required service, while properly managing the risk of an industry that is characterized by being both demanding and risky. A significant number of new customers including large local and international contractors have been won, involving projects worth billions of Dirhams. This business is bound to grow and become a major contributor to the Bank's income in the near future. Qualified and experienced staff supports the unit, with the ability to deliver the assigned goals in the whole region.

In practice, Islamic banks frequently employ Istisna to finance construction. Classical Islamic Law allows the constructing party in an Istisna to undertake the construction, not on its own, but by contracting a second Istisna with the third party. Islamic banks have used this structure, called "Back-to-back Istisna", to finance purchases of building materials, etc. Under the first Istisna, the bank as seller accepts a long-term schedule of payments from its customer, while under the second Istisna the bank as buyer pays the contractor over a shorter period with progressive payments. The difference between the present value of payments under the two contracts is the Bank's compensation for the finance. The mechanism is analogous to a Murabaha with order to purchase.

The bank will enter into a Musharaka by purchasing a common share in the property.
Types of Musharaka:

1. Fixed or continuous Musharaka
2. Diminishing Musharaka
3. Increasing - diminishing Musharaka

Murabaha is simply a sales contract that fixes the price of certain goods or, items, plus a specified percentage markup (profit). Murabaha enables DIB to " avoid the drawbacks of speculative trading because no purchase is made unless the customer identifies what he wants and from which buyer. DIB fixes, the deal for him, along with profit. A Murabaha must fulfill the conditions of a valid sale transaction such as the, seller's established ownership of the commodity, its present physical availability, and its use not being against Shariah principles, besides sale being unconditional. The payment of Murabaha goods can be made to the bank by a client on sight or on, deferred payment basis. Local Murabaha deals with the availability of goods in the, local market.

Here, the goods are imported on Letter of Credit or on a collection basis from outside the UAE. DIB implements this for its clients through its network of experienced dealers who have a comprehensive inventory of the most innovative products for corporates and individuals.

This type of Murabaha is for financing the purchase of building material. The limit of the required building material for real estate projects shall be determined by the Real Estate Department after studying the economic feasibility of the project, the financial position of the customer and the actual need for building materials for the projects.

Phone:+97142953000
Fax:+97142954111
E-mail:contactus@alislami.ae

Phone : +971 4 2117400 (Within UAE call the free 8004008)

Once you have decided on the property you require there are going to be a number of issues that need addressing. Here are just a few to run through:

1. Can you afford it? More importantly are you prepared for the property to go down in value as well as up? Property is just like any other investment and can fluctuate according to the overall market.
2. How long you are going to hold the property will determine whether you can be sure it will make money or not.
3. Can you afford it if the interest payments change? Lenders can alter the interest rate or the term potentially and this could have an impact on your monthly payments.
4. Check if you can pay off the loan early and if so there are any penalties in doing so? Can you change lenders at a later stage? What currency do you require?
5. Can you afford the transaction costs? Typically local lenders are charging 1% of the loan value as a processing fee not to mention the insurance element too. Have you budgeted for legal, protection and any other conveyance type cost?
6. What are the ongoing maintenance costs of your property and the communal areas and are they due to rise - if so by what amount? Who controls the rise in maintenance fees - developer or the residents?
7. Do you need to purchase through an offshore company or Trust? Property law in Dubai is based under Islamic Sharia principles and as such in the event of the demise of your husband; the property may bypass the wife as the new legal owner.
8. Can you sell the property on without restrictions? Similarly, you may wish to mitigate your death tax exposure by using some form of offshore structure. Buying property in Dubai will not avoid death taxes from your home country unless correctly structured.
9. Have you sought professional help with protecting the property should a serious event occur? Life Cover, Income Protection, Critical Illness Cover, Permanent & Total Disability in their various forms should be reviewed and budgeted for. Seek the professional services of a good agent who is willing to spend time understanding your profile so the right properties are selected for you. Likewise, take guidance from a lawyer if buying locally and employ a suitable conveyance group when buying overseas. And finally, secure sound financial advice from an independent source.