Banks restructuring loans and real estate financing affected by Corona

Emirates News Today, bankers reported that banks are facilitating rescheduling of loans and real estate financing, on the condition that revenues from funded buildings decline, and the income of owners of private homes decreases, due to the repercussions of the spread of Corona over the past months.

They assured «Emirates Today» that banks – in the interest of retaining their customers – offer competitive interest rates for rescheduling operations, starting from 2.99% to 3.25%.

They pointed out that the real estate buying and selling movement is witnessing a calm worldwide, despite the decline in prices, due to the uncertainty about the economy’s recovery from the effects of “Covid 19”, and also there is a decrease in rental values ​​and income from business, so the value of real estate installments has become relatively high compared to With income, and this is what made banks tend to reschedule operations, to ensure that the customer does not default or stop paying.

Mortgage borrowers

In detail, the banker, Ahmed Arafat, said: “Real estate borrowers were covering their monthly installments from the return of the property, in addition to a part of their salary that does not exceed 50% of income, but after the spread of the Corona virus, the rates of rents resulting from real estate decreased, affecting the deduction Some people pay, for example, 20 thousand dirhams of their 30 thousand dirhams, after they were paying only 10 thousand dirhams, in addition to the part that comes from the revenue of the property or the rented villa, and here it is better for the bank and the customer together, to make a rescheduling , As a guarantee that the customer will not default or stop paying.

Arafat explained that the levels of “EIBOR”, which is (the rate of inter-bank lending linked to real estate financing), are low globally, so the average interest rate on rescheduling operations is considered competitive at the present time, and ranges between 2.99 and 3.25% annually, and this is an acceptable rate. Largely given market conditions.

sell and buy

For his part, the banker Muhannad Aouni said: “The spread of (Covid-19) has affected the movement of buying and selling real estate globally, and there is a decline in rental real estate revenues, so there are facilities from banks for dealers to make rescheduling at low prices, starting from 2.99%.” , Indicating that rescheduling real estate loans affected by the decline in revenues and rents is better than turning the bank into a complete deduction from the customer’s salary, for example, in contradiction to the Central Bank’s instructions that the monthly deduction does not exceed 50% of the customer’s income.

He noted that dealers who comply with the terms of the restructuring and the bank’s policy can benefit from the facilities provided, whether at the level of fees or low interest rates.

Flexible policy

For his part, the financial and accounting expert, Mohamed Helmy, said that “Banks in the UAE pursue a flexible policy, in order to preserve market stability and dealers not to falter, due to the repercussions of Corona, so I began to advise dealers, whose real estate revenues have declined, to make a rescheduling of their real estate loans. , To ensure that they continue to pay the installments comfortably, not exceeding the maximum permissible deduction from the Central Bank.

And Helmy indicated that the uncertainty prevailing in the economic situation in the whole world makes there is keenness on the part of banks to ensure the continuation of financial flows, by borrowers, with their help, whether by rescheduling loans or postponing installments, pointing out that mortgage financing is somewhat long-term. And it extends for years, so it is best to guarantee payment of installments and reduce them, as long as there is room for that.

• Competitive interest rates for rescheduling operations, ranging from 2.99% to 3.25%.

• Dealers who comply with the terms of the restructuring and the bank’s policy can benefit from the facilities provided.

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