Dream Home, No more a dream
Owning a home of your liking has become a reality with a wide range of customer friendly housing loans offered by the banks in Oman. OER takes a look.

Mohmmad Al Balushi, the 30-year old finance manager working in a prominent trading company and his wife who works as a marketing officer in an insurance firm, moved into their own 2-bedroom apartment located at Al Hail in January. “We were tired of living on rent. In the last two years, our rent had shot up by more than 100 per cent. We always dreamt of having our own house one day. A home loan from a leading bank with an equated monthly installment (EMI) not more than the monthly rent that I was paying earlier has changed our life,” he said.

That’s not the story of Mohammad alone. Many young Omanis in their 20s and 30s are opting for buying their own house instead of paying spiraling rents. Just few years ago, people had limited options to raise finance to build or buy a house. They used to either save the money over the years and decades or borrow from their employers or friends and relatives.

The credit for this transformation goes to the government for introducing market friendly regulatory reforms and banks for offering customer friendly housing loans options. In fact, if you open any popular publication or move around in the city or a prominent market, you are bound to get attracted to ads of housing loan products from the banks. Most of the housing loans products provide finance options for purchase and construction of new house, purchase of old house, purchase of plots, renovation or reconstruction or extension of existing house. They also promise to refinance the current housing loan at better terms.

Ahli Bank - MyHome
Ahli Bank, earlier known as Alliance Housing Bank, has recently launched MyHome, the new home loan product. It promises customers the benefits of largest loan amounts with lower installments. The loan is repayable in a period upto 30 years and the low initial installments make it affordable year after year. Speedy approval process and lower insurance premiums on both life and construction are added advantages of the MyHome loan.

On the benefits of the bank’s new loan offerings, AbdulAziz Al Balushi, CEO, Ahli Bank said, “Our objective is to offer outstanding value to customers by providing knowledgeable, efficient and reliable products and services in a personal, helpful and responsive manner. Our customer service and financing team is well trained to offer quick financing and reliable service for the best loan packages in Oman.”

Adding further, Karim Boukarroum, Head of Marketing, Ahl Bank Said, “Our new housing loan product is again unique; it’s the only one that offers high loan amounts with lowest installments because it’s based on low start repayment that increases only 2 per cent every year, which makes it affordable year after year as your earning power increases.”

On the intense competition in the market, he said, “The housing loan war is no longer based on interest rates, we have done many studies and the main factors are loan amounts, low installments, low insurance premiums and speedy processes.” More information on My Home can be obtained by calling on telephone 24568001.

Oman International Bank
“We at Oman International Bank offer competitive interest rates with the lowest processing fees. As an added advantage, through our very extensive network of branches, we are able to provide customers an excellent and prompt service,” said Khalil Al Hedaifi, Head-Retail Banking, Oman International Bank on the bank’s loan products.

Adding further, he said, “Currently there is a boom in the real estate market and with a lot of new projects coming up housing loans are essential. Our interest rates are competitive and are subject to market trends and prevailing conditions. Prices of real estate are on an upward trend and this is a good time to invest. Once prices go higher customers will have to pay more irrespective of interest rates.”

On the market competition, he responded, “From our point of view, we have noticed a lot of our competitors have come-up with different housing loan schemes, in response to booming real estate prices. Prices are rising and we feel this trend will continue for some years. Competitive prices are always expected by the market and we guarantee our customers better rates and services.” For more information visit www.oiboman.com

Bank Sohar - Al Bait Al Mumayaz Home Solutions
Bank Sohar has also entered the home finance market with a product Al Bait Al Mumayaz Home Solutions. It is available to Omani citizens and resident expatriates who may wish to invest in one of the government approved property development projects coming up in Oman. “Every person aspires to own a home. At Bank Sohar, we anticipate life’s aspirations and offer life cycle financial solutions that meet these needs. We invite those planning to buy a house, purchase land and build a house, renovate an existing property, or buy out of an existing housing loan facility from another bank to come and see us and check out what we have on offer,” said Khalfan Rasheed Al Tal’ey, Deputy General Manager - Retail Banking, Bank Sohar.

“With the unique features that are associated with our scheme the customer does not need to compromise on his budget. The minimum age eligibility for availing the ‘Al Bait Al Mumayaz Home Solutions’ is 18 and maximum is 60, at maturity of the loan. While Omani citizens can avail loans up to a maximum of 80% of the value of the property, Expatriate customers can avail loans up to a maximum of 70% of the property value,” added Khalfan Tal’ey.

Nani B. Javeri, Chief Executive Officer of Bank Sohar, said, “It’s the differentiators of the Bank Sohar product that are going to set it apart and attract customers who are in the market for housing finance. Our interest rates are attractive and we offer lower monthly installments. We are able to offer customers a higher loan amount because we take their total income into consideration. Customers stand to gain higher loan entitlements under our joint borrowing option wherein loan limit is linked to combined income of all joint borrowers. We have made sure that associated systems and processes are in place, and ensured product training to our staff in order to ensure flawless service to our customers. The ‘Al Bait Al Mumayaz Home Solutions’ is taking us a step closure to provide, a full life cycle banking solutions to our customers.” More information is available on the bank’s website www.banksohar.net.

Oman Arab Bank - Al Dar Housing Loan
Talking about Oman Arab Bank’s housing loan products, the Bank’s Deputy Head, Retail Marketing & Business Development, Jamil Abdul Qader, said, “OAB’s Al Dar Housing Loan has many added value features such as the ability to combine it with our Al Madmoon loan that enables the borrower to avail 100 per cent financing of the property. In addition, and by OAB being part of the Arab Bank Group with more than 400 offices around the world, it gives us the potential of structuring deals more easily for non-resident expatriates borrowing for purchases in ITCs. Combined with competitive pricing, repayment period of up to 25 years makes our housing loan proposition an exciting one.”

Adding further he said, “It is estimated that over 10,000 residential units are coming to the market over the next few years. Interest rates currently offered by the banks are in a similar range. However and due to strong competition between the banks, rates have seen a slight drop. Generally speaking, interest rate will continue to be within the existing range but with a few adjustments to cater to the increased competition.” For more information, visit www.omanab.com.

National Bank of Oman – Al Manzel Housing Loans
National Bank of Oman launched Al Manzel Housing Loans in June 2006. Adil Al Saleh, NBO’s Head Mortgage Banking & Strategic Alliances said, “The Bank recognizes that it’s the dream of every Omani to own his or her home and in keeping with the commitment to fulfill the customers’ every financial need, NBO has developed a unique proposition that will help them realize their dreams. NBO offers loans that help customers build or purchase their home, purchase land, simply renovate or extend their existing home, in a simple and easy way.”

Al Manzel offers maximum repayment period upto 25 yrs with attractive interest rates for both salaried and self employed customers. There is no maximum limit on loan amount. They are available to both resident and non-resident Omanis and expatriates. Al Saleh added, “we offer door step services with quick processing. Our bank representative meets the customer personally as per their convenience.

We offer competitive interest rates with floating and fixed option to best suit the customer’s needs. We have tie-ups with reputed builders and key corporate for exclusive offers. There is no prepayment penalty if customer pays from his own sources and there is no partial prepayment penalty also.

We give 100% funding for construction if the plot is already owned by the customer. We give attractive insurance option for both life and property. We have unique flexibility in repayment with no principal repayment upto first five years. We offer redrawing facility for amount prepaid.” NBO won the ‘Best Mortgage Product’ Award 2008, at the Banker Middle East Product Awards 2008. Check out the Bank’s website www.nbo.co.om for further information.

BankMuscat – Baituna
BankMuscat offers its customers a suite of housing loan products branded, ‘baituna - Home Finance’. BankMuscat’s baituna suite of products comprises of baituna Classic Home Finance, baituna Gold Home Finance and baituna Plus Home Finance. The baituna suite of products is available for purchase and construction of homes for first-time buyers, purchases of second homes or retirement homes, and also for purchase of land for residential use at selected locations. Financing is offered primarily to Omani nationals, though the suite of products also provides financing options for GCC nationals and expatriates who wish to seek housing finance for properties in the Sultanate. The Bank also provides refinancing options to customers with existing housing loans from other organizations.

In September last year, BankMuscat had announced a unique Baituna 6 in 1 offer to celebrate its 25 years in Oman. The 6 in 1 baituna home finance bundle of value and savings included pre-approved finance, addition of consumer loan, competitive life and fire insurance rates, eligibility to win with al Mazyona, and a free credit card. On the occasion of signing the mortgage agree with the The Wave, Muscat, Sulaiman Al Harthy, DGM-Consumer Banking, BankMuscat said, “As the nation’s leading bank, we are committed to offering our customers with a choice of housing solutions that cater to their taste and lifestyle.” For more information, visit the Bank’s website www.bankmuscat.com.

HSBC – Home Loan
HSBC’s Home Loan is designed to meet the specific needs and aspirations of the customers. As per the information available on the bank’s website www.oman.hsbc.com, HSBC’s Home Loan comes with many benefits that includes home loans for Omani nationals and expatriates, competitive interest rates, higher loan amount (up to RO250,000), finance up to 80% of the market value of the property, up to 25 years repayment term etc.

Think before you act
According to investment experts, this is the right time to buy a property. Living in your own house is better than paying high rents. Even if you already own a house, it is worth investing in a additional properties by taking the housing loan. With the boom in the economy, the demand for expatriates will continue to rise which will further push the rentals as the demand will be far more than the supply of residential units. But before taking a housing loan, one must do his home work well to get the best possible deal and returns in the future.

Preferably speak to your bank about home finance only after you have identified the property you want to buy. Take a sanction for the loan only after identifying the property. Banks are known to reserve the best deals for immediate disbursement cases.

Banks have different ways to calculate loan eligibility. If loan eligibility based on your income is likely to be an issue, then talk to several banks to find out which bank can give you the maximum amount. Remember to have own funds to the tune of 10-20% of the house cost. You should shortlist atleast 2-3 banks and get the shortlisted banks to compete for your loan.

The cost of your loan depends a lot on your ability to negotiate. Remember that all terms and conditions of a housing loan are negotiable in many cases. Interest rates offered by banks take your income and repayment profile into consideration, apart from, of course, your negotiation skills. Apart from interest rates, also check various charges like processing fees, pre-payment charges, legal fees, valuation fees and other hidden costs. Take all these factors into account before choosing your bank.

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