Buyers, in Egypt, currently have very limited alternatives for financing their homes. One alternative is financing by the owner or developer. The other is short-term financing with rather high interest rates offered by banks. This still leaves a large part of the population unable to find the financing which would enable them to own a home. Therefore, what remains to be developed is a mortgage system with mortgage laws offering various creative financing packages based on solid, objective and standard criteria.
Real estate is defined as land plus permanent man-made additions.
The mortgage market is divided into a primary mortgage market and a secondary mortgage market. Sources of funds for the primary market include trusts, savings associations, commercial banks, credit unions, pension funds, endowment funds and private investors. Once the source of primary mortgage money has been established, certain criteria and guidelines are set for lending from these funds. These include standard appraisal guidelines for the properties to be mortgaged, loan durations, interest rates charged for the loans and the fees involved in making such loans, as well as the methods and intervals of repayment. Long-term real estate financing amortised over 15 to 30 years, with monthly repayments and various creative packages of both fixed and adjustable rates, are imperative if Egypt's real estate market is to expand.