General View

Mortgage Finance

It is a loaning process that provides cash flow (not exceeding 90% of the value) for the purchase or construction of houses as well as administrative, services and commercial units and for renovating or improving existing ones. Then borrowers shall make a 10 to 20% down payment and pay off the rest in installments for periodic payment for a maximum of thirty year (according to the agreement with the finance institution), in case the borrower pay all the installments the property shall be acquired for him.

The Mortgage Finance System gives the borrower the option to choose a suitable property for him in all over Egypt.

The Property

A mortgage is mainly secured by the property for which the mortgage was required. This property shall be chosen by the mortgage finance applicant or by any certified real estate broker. It shall be registered in the real estate registration office or able to be registered. In case of lands and units in new urban cities there is only one condition which is  to provide a letter from the administrative office of the city in which the property located for the finance institution states that there is no objection to register or mortgage the building without the land.

Parties to mortgage finance agreement:

1- Borrower (Mortgage Finance Applicant).

2- Lenders; firms or banks authorized to practice Mortgage Finance activity.

3- Owner of the property or contractor.

Parties related to Mortgage Finance:

1- Mortgage Broker: - is the person (or organization) authorized by Mortgage Finance Authority (MFA) which is replaced by the Egyptian Financial Supervisory Authority (EFSA). He facilitates transactions between mortgage borrowers and owner/ contractor or Mortgage Finance Firm or Bank, Helps the borrower in select the property that suits his budget and calculates the monthly installments that can be afforded and the appropriate payment period as well as the suitable Financial Institution to deal with. He also helps prepare and submit the required documents to the lender.

   The Broker shall provide the borrower with a 'Form' comprising the basic conditions for real estate finance developed by EFSA, inform him with the mortgage conditions and risks, and prepare mortgage finance file. The lender shall undertake to pay all brokerage fees (not to exceed 2.5% of mortgage finance value)

2-  Appraiser:  is a person or (organization) registered at EFSA in a special record. Authorized to evaluate the property and determines its fair value by an assessment report for the lender, upon which the required loan amount shall be determined, in order to notify the client with the assessment result and estimate the value of the property in case of purchasing. The lender shall appoint the Appraiser while the Borrower shall bear its fees.

3-  Real Estate Agent:  is the person or (organization) assigned by execution judge among agents registered at EFSA, to conduct the selling procedures of the property in public auction, in case of default in payments by the borrower.

     To be appointed, he shall have no direct or indirect interest in selling the property or with the lender or the borrower.

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