In line with the recent Cabinet decision to amend, cancel or suspend some allowances, allowances, bonuses and financial benefits on all government agencies, the Saudi Arabian Monetary Agency (SAMA) has directed banks and mortgage finance companies to reschedule the loans of customers with real estate financing affected by the monthly income adjustment.

The decision includes institutions, public bodies, funds and other public legal entities.

The decision includes institutions, public bodies, funds and other persons with other public legal status, and given the possibility that the monthly income of some customers with real estate financing may be affected, which will reflect on their ability to repay the financing, and in order to address their financial conditions.

The decision includes institutions, public bodies, funds and other persons with other public legal status.

Commitment to offer rescheduling options

According to the regulations set by SAMA to reschedule these loans: Obligation to present the options available for rescheduling in a concise, clear and easy-to-understand format, and to be accurate and not misleading, with an explanation of the implications of each of these options - compared to the situation when the last installment was due before the issuance of these instructions - provided that the explanation includes, at a minimum, the amount of the installment, the remaining financing period, the total cost of financing, and the annual percentage rate, and for mortgage contracts with a fixed term cost it must not change the contracted term cost until the end of the financing period after rescheduling, and for mortgage contracts with a variable term cost it is obligated to use the term cost that was under the

No additional fees

The regulations issued by SAMA approved the obligation not to calculate any additional fees or expenses and not to reduce the services and benefits that the customer used to receive before rescheduling, such as insurance coverage, and the premium percentage of the new monthly income must be determined so that it does not exceed the percentage specified when granting financing, and with the consent of the customer who has no other credit obligations with any other financier from banks or finance companies, the percentage may be set at levels commensurate with the customer's circumstances and financial obligations, taking into account internal credit policies and customer protection principles.

The suitability of premiums for the future situation

Also, with the customer's consent, the rescheduling option may be offered with increasing installments, and this is for those covered by these instructions only, taking into account the determination of installments in a manner that realistically fits the expected future situation of the customer, and the customer's age on the date of payment of the final installment after rescheduling must not exceed what was agreed upon in the original financing contract or 65 years (whichever is higher), and the documents and documents on which the customer obtained the rescheduling are documented and saved.

Documents based on which the customer obtained the rescheduling are documented and saved.

The instructions do not cover new contracts

The Monetary Authority warned that these instructions do not include new contracts that are signed after the issuance of these instructions, and that banks and mortgage companies must exercise due diligence to assess the appropriateness of the value of the installments and the duration of the financing to the customer's circumstances, and give priority to the first installment due after the entry into force of the above-mentioned Cabinet decision. It also stressed the need to inform customers affected by the salary adjustment of the procedures that will be taken to reschedule loan installments, and the procedures for addressing complaints that may result from this.

SAMA also directed banks and mortgage companies to inform customers whose loan installments are affected by the salary adjustment to visit the nearest branch to provide information and official documents proving that their monthly salaries have been affected.