Taking out a home loan or mortgage is always a big undertaking, no matter where in the world you are. It is a process that needs to be carefully deliberated over, and each nation has its own rules and regulations. That is why it is always important to do your research early on, no matter how confident you are in your finances. Saudi Arabia is like every other nation in that it has its own specific requirements. So, here are five things that you need to know before you begin the process of taking out a loan to buy a home in Saudi Arabia.
1. Home Loans Are Relatively Recent In Saudi Arabia
Did you know that the Saudi government only started allowing mortgages in 2012? Home loans have been a hotly contested issue for decades in Saudi Arabia, in large part because of arguments about whether they should be compliant with Shari’ah Law. That means that the person borrowing money must pay on the part of the home that the bank owns, as well as the principal. Home loans had initially been banned in 1981.
2. There Is A Big Push to Build More Homes
If you are diving into the housing market in Saudi Arabia, one thing that you should know is that you may be facing a lot of competition. The government has committed to building a lot more affordable housing for its citizens, setting a massive target of 1.5 million homes to be constructed by 2030. Real estate companies like Dar Al Arkan are part of this big push, launching new projects in cities like Mecca.
3. Getting A Housing Loan Can Be Quite Complicated
As you may have gathered, there is a lot of demand for space when it comes to housing, and the two elements of the loan repayments to be compliant with Shari’ah Law mean that there are going to be a lot of bases that need to be covered.
The main thing that the loan providers will want to know is that you are going to be able to make your repayments. They will want to see that you have a steady job at a reputable company, and you will need to be applying for the home you are going to live in yourself. You will also need a government letter of approval.
4. You Will Need To Get Your Finances In Order
To be fair, this point goes for any nation that you would be applying for a mortgage in. In Saudi Arabia, it is important that you provide the money for a deposit yourself, rather than borrowing it. As we mentioned, it is vital that you can demonstrate financial stability. Don’t rush into this, do it when the time is right.
5. Talk To A Reputable Provider
Getting a home loan is always a potentially risky proposition, so it is always worth doing your homework to find a provider that is trustworthy. You need to talk to someone who knows the region and the requirements intricately, and that has strong partnerships with the local authorities.
If you are looking for a mortgage in Saudi Arabia, Quara Holding was one of the first companies to offer Sharia-compliant financial products, and they are committed to providing quality, accessible service.
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