The mortgage financing system aims to provide suitable housing for people through a payment system based on their income.
Because of the high cost of real estate and the difficulty of owning a suitable property with self-financing, people resort to mortgage. But what is a mortgage and who provides it?
Mortgage financing happens when a home buyer wants to invest in owning a residential property, and the bank ensures you can repay your loan through certain qualifying criteria, such as: selling the property must be approved by or foreclosure when failing to pay the mortgage.
In 2004, the Mortgage Finance Guarantee and Support Fund was established with the aim of delivering mortgage financing for low-income individuals by reducing the value of mortgage finance to what the investor can repay, which contributes to fair distribution and ensures mortgage market balance. Recently, the Central Bank of Egypt also announced the Mortgage Finance Initiative, offering lower interest rates for home-buyers with different incomes.
What is the Central Bank’s Mortgage Finance Initiative?
The Central Bank of Egypt initiative provides financing to individuals by reducing the interest rate after full repayment and by distributing the interest rate and loan amount into segments based on individual income, which are as follows:
1- Low-income
2 – Medium-income
3- Above medium-income
What can be obtained by a mortgage loan?
The real estate finance system aims to provide a property for clients with an easy payment system suitable with their incomes, such as:
- Buying, building or renovation
- Housing units
- Administrative units
- Service facilities
- Commercial properties
What are the requirements for the loan?
Targeted group are individuals with fixed income, employees of government, public, investment sector, and trade unions members, in addition to self-employed with a commercial register and tax cards. Clients benefiting from the initiative, must have Egyptian nationality and residence (age not less than 21 years and not more than 60 years at the end of payment),
What are the advantages of a mortgage loan?
– Move to your new house as soon as you get the loan
– Obtaining a financing amount that may reach 90% of the value of your new home.
– Paying fixed monthly installments throughout the financing period.
– Payment over the longest possible period of up to 20 years, which is not available in any traditional financing method.
– Choose the unit you want anywhere in Egypt or from available units at the fund.
– Own your home with monthly installments close to average rental value.
– Accelerated Payments of all or parts of the loan are available at any time (subject to fees or appraisal costs in line with the terms and conditions of the funding body and the Initiative Fund).
– Owners benefit from the immediate payment.
What documents do you need when applying for a mortgage loan?
- Proof of income
- Personal identification documents
- Proof of residency
- Documents for the desired housing unit
In case of purchasing a residential unit in a new property, applicants must provide:
- Copy of the land deeds
- Copy of the building permit
- Real estate taxes/returns report (if any)
- Letter of Authorization/Form 19
In case of purchasing a housing unit registered in the name of the seller:
- A copy of the title of the registered housing unit
- Letter of Authorization/Form 19
- Real estate taxes/returns report (if any)
In case of purchasing housing units in new urban communities:
- Notarized allocation decree
- Land receipt report
- Copy of the building permit
- Financial position of the land in terms of allocation
- Returns report (if any)
- Assignment of the allocation and owner’s approval of mortgaging the buildings without the land, according to the Housing Minister decree No.100/2014.