The ideal mortgage applicant

With Wizard Midrand's founding member now out in Dubai, coaching the banks and teaching mortgage companies the ins and outs of bond applications.... he's been really busy! In fact so busy that we haven't had an article from him in ages....

Well, we managed to get hold of Chris Green, and we asked him one simple question:

What are the criteria for an ideal mortgage applicant at the current time in Dubai?

There are two sides to each application for the ideal mortgage applicant to be relevant.

One being the person (Pre approval) and the second being the property (valuation). Once these two sides are dealt with separately and equally, they can then be joined at the hip to become the perfect mortgage applicant.

So starting with the individual, when a pre-approval is done by any finance house, the basis is on the credibility of the person wanting finance and the perceived credibility as seen by credit managers within the banks. With lenders appetite for risk being extremely sensitive and probably at an all time low, all of them are looking for “Mr. Perfect”.

So the profile of “Mr. Perfect” is typically a person who is buying to live in and not to let out. They are seen as a person who is here to stay. They must be a salaried individual or couple who earn a fairly reasonable income and that income must be deposited into the same bank account each month and they must have one hundred percent correlating salary pay slips.

The company or industry that they work for must not only be well established (at least 2 years in business) but ideally be seen as a non-risk industry because each lender has certain industry criteria that they feel is a risk to their lending policies. Credit cards, car finance and other finance vehicles must be paid on time every month and there must be no late payments whatsoever. That is sure guarantee to have a mortgage decline. Pay on time always.

Unusual deposits and bank transactions attract scrutiny by credit managers and explanations are needed for all of these. Letters of reference from other banks that the client deals with are always a bonus. It is also assists that when a person is from another country and can provide an up to date credit report from that country, it gives the credit managers a decent birds eye view and objective understanding of the prospective client.

Lastly having a fixed deposit with some money in at the lending bank is a definite bonus as this will affect your credit status to the good and you can earn about 6.5%.

The ideal property is one that is completed and registered in the lands department. Any variation of this, makes the second part so much more difficult as you are then totally reliant upon the lenders criteria of developers and their famous developers lists. Because of these lists the clients are often limited to who will provide finance and also what loan to value they will offer.

Once these two are married, you have the ideal mortgage and then to get the better rates it often comes down to client standing in the bank and how much deposit he can put down to bring his loan to value down.

Currently, we are seeing one in five applicants who are matching this criteria .