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Learn about Home Loans

How is my mortgage application evaluated?

After submitting all the documents and the conditions required to obtain a mortgage, your bank will verify your credit information, via The Saudi Credit Bureau (SIMA). This ensures that the client fulfills the financing conditions. After that is completed, the process of assessing and valuing the property takes place.

What are the charges linked to my home loan?

The first installment is 30% of the value of the property. Administrative fees ranging from 1,000 to 5,000 riyals are then due. In addition, there is a real estate valuation, which costs around 3,000 riyals.

Can the income of more than one person be considered for eligibility calculations?

Uniquely in Saudi Arabia, one does not require a spouse for a joint application. To include more than one person, the same conditions for student funding will apply. The applicant must have Saudi nationality, in addition to more than three months of payslips, showing a monthly income exceeding 2,000 SR.

Frequently Asked Questions (FAQs)

What are the available mortgage systems ?

Real estate financing methods differ in Saudi Arabia, where they are divided into two sections; as follows: Lease: It is a financial system based on the client requests from the financier or the bank to buy a property in exchange for monthly payments, covering the value of this property, as well as the profit margin agreed. At the end the property title is transferred over to the client. - Mortgage: It is a loan based on the bank financing an amount, not exceeding 70% of the value of the property. The property will be registered under the client's ownership but the bank retains the title deeds.

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What is the concept of the home loan?

It is based on the concept of real estate financing in Saudi Arabia called “Murabaha”. This is one of the most popular funding methods for Islamic banks in Saudi Arabia. It means that the customer can acquire property, whether for personal or investment in exchange for a monthly payment, for a fixed period until the client pays the whole loan plus the fixed profit margin. After that, the client will be transferred the full ownership of the property.

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Are you eligible to apply for a home loan?

The client must obtain the following requirements to be eligible: Hold Saudi citizenship or obtain MoI permission for non Saudis, Be between 18 and 60 years old, Monthly income exceeds 3,000 SR, To be an employee of accredited companies and The client is willing to pay at least 30% of the property value

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What are the required steps to apply for a home loan in SA?

First you have to choose the property, then you can apply for a home mortgage, by applying to banks or financial institutions, that offer financial services. You will need to provide the following documents:A completed loan application, A copy of a valid ID card (or Iqama card for none Saudis), Letter from your employer stating your position and salary, A copy of the title deeds of the property and A map showing the location of the property

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What is the average interest rate in SA?

Interest rates depend on several factors, including the value of the property and the loan duration, but the average interest rate is around 3% of the property value.

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Which banks are offering home loan in SA?

All Saudi banks provide housing lending services with different packages. In addition to banks, also there is availblity of other service providers whom are specilaized in home financing and are licensed by SAMA.

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What are the most important advantages to look for in institutions before borrowing?

Customer needs vary from one person to another. The upper limit of funding varies from one bank to another, in addition to the repayment period, which can range from 20 to 30 years. You must inquire about the loan ratio, interest rate, insurance deductables, administrative charges, any other hidden charges the bank is willing to offer.

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What is the maximum amount allowed for a home loan?

The amount varies depending on the client's income and the amount of the first installment. The type of program offered by the bank will vary, but the range is usually between 3,000,000 and 5,000,000 SAR.

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How long will it take to get my loan approved?

After completing all the requirements and submetting the application, the process takes between five to ten business days.

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what is the maximum repayment period?

Repayment periods vary from one bank to another, usually they will be between 20 and 30 years.

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