When getting a mortgage, banks will look at your income and outgoings to determine your affordability – which ultimately affects how much they will lend to you and what property you can afford. It is possible to boost your affordability with other sources of income, such as rent or bonus income. In these instances it is more important than ever to keep clear and detailed financial records.
The client was an Egyptian national who had been living in the UAE for 5 years and worked as a construction engineer for a multinational company. He contacted us directly as he was interested in purchasing a villa in Abu Dhabi to live in.
During our initial conversation, the client informed us that he already owned two other properties in Abu Dhabi. He was currently living in one of the properties, which had an existing mortgage, and the other property was mortgage-free which he was renting out.
The client had saved the required down payment amount. However, the main issue in the case was that the income from his job alone was not sufficient to meet the banks’ affordability criteria for the price of property he was interested in buying.
Furthermore, when we received the client’s financial statements and paperwork, we quickly noticed that there were missing records which caused gaps in his recent financial history. We knew any bank would question these gaps and would likely reject the application because of these inconsistencies.
As the client did not have sufficient income from his salary alone, we decided the best option would be to approach a bank that might consider both his salary and rental income as part of their affordability checks. We knew that his rental income, which had been steady for several years, combined with his salary would be enough to boost his affordability. We contacted our banking partners and after initial conversations with them, we settled with the bank that agreed they would consider his rental income and still offer a competitive rate.
Next, we carried out a full assessment of the client internally, in the same way that this bank would, to ensure maximum success for his application.
Following this assessment, we advised the client that the best chance of success for his application would be for him to build up a record of all his finances and paperwork for the next three months, as we knew the bank would require clear and thorough records. After this, we would then progress with the full application process.
We reconnected with the client a few months later – he returned with all the required paperwork and documents. In this time, he has also managed to save more towards his down payment so he was now looking to purchase a larger property within a prime area in Abu Dhabi.
The application moved swiftly from this point since we had already done the work in selecting a bank that would take his rental income into account. The client went on to purchase a beach villa in Saadiyat Island.
How can we help you?
Our team has a solid and in-depth knowledge of the products offered and the lending criteria of banks in the UAE. We have also developed strong relationships with the banks to be able to approach them directly with client situations which might be more complicated and therefore more likely to be rejected if not dealt with carefully. Using our knowledge and relationships, we work to get you the best mortgage for your circumstances!
Case study by Abdelwahab Sawas, Senior Mortgage Consultant