FAQs
The Real Estate Property
The Applicant
Financing
Building a Home
Real Estate for investment "Irad"
The Real Estate Property
Q: Is it possible for me to sell the house after a specific period of time?
A: If the intention of the sale is to settle your loan installment early, then the sale is approved. However, if the sale is intended to transfer the loan to a new owner/third party, a new application needs to be completed. The third party should fulfill application requirements and must be approved by us.
Q: Is the property subject to your appraisal & who makes the appraisal?
A: Yes. The building or the land is appraised by two real estate evaluation companies nominated by us to ensure that the property is value for price.
Q: If I buy the real estate property through a real estate office, is the real estate office entitled to fees?
A: Yes, it is legal and Sharia compliant.
The Applicant
Q: Is the employer letter required from both public and private sectors?
A: It is required only from the private sector.
Q: Is additional income taken into consideration in the financing?
A: 50% of the additional income is considered on the condition that the monthly installments do not exceed the salary transferred to bank. Also the additional income should be either from an additional job in the public or private sector.
Note: The additional income is subject to credit department approval.
Q: If I deposit more than one salary in my account at Al Rajhi Bank, are all the salaries considered as one income?
A: The salary that is not the main one is considered as an additional income.
Q: Is it possible to have a joint applicant, other than the husband/wife?
A: yes, it is possible and the same conditions apply:
- One of the applicants must have a minimum salary of SR 2,000
- The monthly installment must not exceed the salary transferred to your salary with us
- One of the applicants must have his salary transferred to Al Rajhi Bank
Q: Can the joint applicant have a personal loan, after he committed with the main applicant to home finance?
A: Yes, he can. But it also depends on the credit limit of the joint applicant.
Q: In the case of joint applicants, is the installment deducted from both applicants or from the main one?
A: The installment is deducted from the main applicant. The table below explains the deduction in details:
| Salary of Main Applicant |
SR 10,000 |
| Salary of joint Applicant |
SR 4,000 |
| Total Salaries |
SR 14,000 |
| Monthly Installment |
SR 6,300
(the monthly installment is 45% of the total salaries) |
Note: The monthly installment should not exceed the salary of the main applicant. The upper limit to the monthly installment is the salary of the main applicant that is transferred to us.
Financing
Q: When can an advance payment be made?
A: An advance payment is deposited in the customer’s current account when the application is submitted. The advance payment is requested in the application approval process and is deducted from the total loan when the loan is approved and the contract is signed.
Q: Will the product profit rate change or stay the same for the customer after years of using, for example, the lease product?
A: The profit rate is fixed until installments are fully paid for Murabaha and Istisnaaa programs. As for Musharaka, the rate is reviewed at the end of a 10-year period.
Q: Is your product compliant with Shari'ah principles?
A: Yes, all Al Rajhi products are under the supervision of the Sharia Compliance Committee and subject to their approval.
Q: Is it possible to settle the total value of the contract earlier and do customers benefit from that?
A: Yes, it is possible to settle early. In this case, the customer can make use of a profit rate discount calculated with the remaining period of installments.
Building a Home
Q: What is "Istisnaa"?
A: "Istisnaa" is an Islamic structured financing product that allows customers to own a home, with the intention of providing any of the following:
- Constructing a building on the customer’s pre-owned piece of land
- Constructing a building for the customer on a bank-owned land
- Completing an unfinished construction of a building for the customer
Q: Can I choose a specific architect or construction firm to build my home?
A: You have the freedom of choosing the architect or the construction company, provided both are approved by the Municipality and Rural Secretariat of the Chamber of Commerce. An agreement is to be signed with the contractor and/or the architect. In case the contractor or architect is not bank-approved, customers should notify their relationship manager to get them approved.
Q: If there are other costs aligned to activities such as: re engineering design, tables of quantities and pricing of the house in addition to the customer's technical specifications: Are these expenses covered by you or me?
A: All of these requirements are at your expense.
Q: Who undertakes the power and water connection after construction; you or me?
A: You and the designing engineer should take on that responsibility.
Q: Who supervises construction details, such as finishing, construction materials, and equipment?
A: You are responsible for choosing every detail in the construction.
Q: If I own the plot of land, am I exempted from the 10% advance payment?
A: Yes, you will be exempted from this payment if you own the plot.
Q: Do I have the right to know the cost per square meter after the contractor is nominated by the Corporation?
A: Contractor rates vary for the construction and design from SR 750 to SR 1,400 per meter.
Q: Will I be exempted from providing construction permits if I own the plot of land intended for construction?
A: You are responsible for processing the building permit. The permit, inclusive of architect and constructor assessments, is to be obtained by you.
Q: Are there specific schedules to be followed in the construction of the property?
A: The duration of construction is determined by the supervising engineer and the contractor. Construction varies from 8 - 24 months, and this is established according to the design.
Q: If the maximum finance is SR 5 million; does this include both the plot of land and the construction?
A: Yes, finance is meant for both, the value of the plot and the construction.
Real Estate for investment "Irad"
Q1: Is there any flexibility in the installment period in terms of stretching it?
A: The installment period is up to 10 years as a maximum limit.
Q2: Can I pay the installments from an additional income?
A: You can add your salary income or the income of a real estate that you own or both of them. As for the addition of the salary, employment period must be at least 6 months with current employer, who must be an approved party by us. Also, the monthly salary must be of SR 2,000 and above.
Q3: Do I receive any income from the annual income (annual rental) of the real estate property during the installment period?
A: You may receive residual rental income after deducting the installments due or any other collection charges if any.
The table below details the customer share after deduction of installments/ dues to the bank.
| Real Estate Age |
Customer share from rental income |
| Less than 5 years |
20% |
| More than 5 years and up to 10 years |
25% |
| More than 10 years and up to 20 years |
30% |
Q: Can I settle the outstanding installments before the contract ends ?
A: Yes, it is possible according to our process.
Q: The income (rental) of the real estate property changes during the installment period, moving either up or down. Does this change affect the installment amount?
A: The installment is fixed and it is calculated in the beginning of the contract. If the change is down, you have to compensate the shortfall, and if the change is up you receive the gain.
Q: Who is responsible for the maintenance of the property during the installment period?
A: You are responsible for the maintenance.