The international bank has issued directives to all banks in the country to comply with the established indicators for mortgage lending, as well as to prohibit the financing of any additional collections or commissions, such as registration fees or agent commissions. Officials from the mortgage lending department of several banks, who refused to disclose their names, reported that their management informed them about the adoption of 'central bank' instructions starting from yesterday.
Some reported that the implementation of new regulations begins in other banks at the beginning of February. They explained that the inspections conducted by the central bank showed that some banks include up to 85% of collections and commissions paid by citizens in the total amount of mortgage credit, and if the applicant is non-resident, then up to 80% of these costs. These amounts break down into a credit term, which can reach 25 years.
The decision to suspend the financing of collections and commissions is spreading to all banks and all emirates; in addition, it is required to comply with the established indicators of financing in the mortgage system, which range from 60% to 85% of the property value, excluding collections or commissions, depending on whether the borrower is a citizen or a foreigner, and whether the property is primary or secondary housing, remaining up to 40% of the obligation to cover the borrower. Collections and commissions range from 4% to 6% of the property value, including registration fees from 2% to 4%, and agent commissions at 2%.
Banks have historically financed up to 80 or 85% of specified amounts over the past years, taking into account in these amounts collections and commissions for the evaluation of monthly payments, which led to the intervention of the central bank for compliance with the norms of mortgage lending, which allow financing up to 85% for primary housing if the applicant is a citizen, and up to 80% for non-citizens. For secondary housing, the credit ratio is 65% for citizens and 60% for non-citizens.
