Ask the experts: Helen Ward tackles your questions

Q I'm looking to buy an apartment in Dubai over the next few months but have read that mortgages are difficult to arrange for apartments, as opposed to villas. Is this, in fact, the case? Is this a sign that apartments aren't such a good investment?

A Banks seem to have taken the stance that apartments are more vulnerable than villas to the price corrections that are currently taking place. This is partly a supply issue since there are many more apartments than villas being released
into the market over the coming months. Also, the belief seems to be that those who choose to buy a villa are more likely to be long-term owners than short-term investors.This does not mean that apartments are a bad investment. It can be quite the opposite, since it's more likely that you'll strike a better deal buying an apartment today than you would have in the past. Certainly your money today will buy you significantly more than it would have done six months ago. As for mortgages, there are still banks that will give you a loan to buy an apartment. I advise you to consult an experienced mortgage broker.

Q We're thinking of buying a new two-bedroom apartment in the Marina or the Palm for about Dh2 million. What amount of loan should we expect for such a purchase?

A Loan-to-Value (LTV) offered by a bank is not just dependant on the property you are purchasing, but to a large extent, it reflects your own personal circumstances. A bank will take the following factors into account when calculating the loan amount on a purchase: how much you earn, your age,your employment terms (salaried or self-employed), whether this will this be your only property, any other liabilities you have – such as car loans, credit cards or mortgages overseas. A rough guide at the moment would be to put aside about 25% of the amount yourself.

Q Is it possible to pay a mortgage in Dubai in foreign currency? (For example, pounds or US dollars.) Is there any advantage in doing so?

A If you already have a mortgage in the UAE, then your lender will be happy for you to make the payments in any currency. However, you should be aware that the cost of converting the foreign currency to dirhams will be borne by you.

To my knowledge, there are currently no lenders actively granting new mortgages in foreign currencies. This is primarily because the current volatile nature of the currency markets would expose both the bank and the borrower to excessive exchange rate risk.

Q I work for a major property developer in a middle management position. Does my profession affect my chances of getting a mortgage?

A Unfortunately yes. The majority of lenders seem to have decided that anyone who works for a real estate company is a high-risk client and therefore are imposing tighter credit terms. Some are less flexible than others, but there is little difference.

Do you have a property question that needs answering? Mail freeholdweekly@alnisrmedia.com along with your contact details.