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Mortgage Extension Agreement for Saudi Arabia

Mortgage Extension Agreement Template for Saudi Arabia

A legal document governed by Saudi Arabian law that modifies an existing mortgage agreement by extending its term or maturity date. The agreement must comply with both Saudi banking regulations and Sharia law principles, particularly regarding interest (riba) and uncertainty (gharar). It details the revised terms of the mortgage, including the new maturity date, any modified payment schedules, and confirmations that other original terms remain in effect. The document requires proper execution under Saudi law and typically needs approval from relevant Sharia boards to ensure Islamic finance compliance.

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What is a Mortgage Extension Agreement?

The Mortgage Extension Agreement is a crucial document used in Saudi Arabian finance when parties need to extend the term of an existing mortgage arrangement. This document is particularly relevant when borrowers require additional time to fulfill their mortgage obligations, but where the fundamental security and most other terms of the original mortgage remain unchanged. The agreement must strictly comply with Saudi Arabian law and Sharia principles, requiring careful consideration of Islamic finance rules regarding interest and uncertainty. It typically includes details of the original mortgage, specific terms of the extension, confirmation of continuing security arrangements, and any modified payment schedules. The document is commonly used in both commercial and residential property contexts, requiring approval from both banking authorities and Sharia boards to ensure full regulatory compliance.

What sections should be included in a Mortgage Extension Agreement?

1. Parties: Identification of the mortgagee (financial institution) and mortgagor (borrower)

2. Background: Details of the original mortgage agreement, including date, registration details, and reason for extension

3. Definitions: Key terms used in the agreement, including references to original mortgage terms

4. Extension Terms: Specific details of the extension including new maturity date and any modified payment terms

5. Confirmation of Original Terms: Confirmation that all other terms of the original mortgage remain in effect

6. Representations and Warranties: Updated confirmations from the borrower regarding their ability to pay and status of the property

7. Conditions Precedent: Conditions that must be met before the extension becomes effective

8. Fees and Charges: Any fees or charges associated with the extension, ensuring Sharia compliance

9. Governing Law and Jurisdiction: Confirmation of Saudi law application and Sharia compliance

10. Execution: Signature blocks and execution requirements

What sections are optional to include in a Mortgage Extension Agreement?

1. Additional Security: Required if additional security is being provided as part of the extension

2. Modified Payment Schedule: Include if payment terms are being modified beyond just the extension of time

3. Guarantor Confirmation: Required if the original mortgage included guarantors who need to confirm the extension

4. Property Valuation: Include if a new property valuation is required as part of the extension

5. Insurance Requirements: Include if insurance arrangements need to be updated or modified

6. Default Provisions: Include if default terms are being modified from the original agreement

What schedules should be included in a Mortgage Extension Agreement?

1. Schedule 1 - Original Mortgage Details: Copy or summary of key terms from the original mortgage agreement

2. Schedule 2 - Updated Payment Schedule: Detailed schedule of revised payment dates and amounts

3. Schedule 3 - Property Details: Updated property description and registration details

4. Appendix A - Sharia Board Approval: Confirmation of Sharia compliance from relevant religious authority

5. Appendix B - Required Consents: Copies of any regulatory or third-party consents required for the extension

6. Appendix C - Updated Property Documents: Any new or updated property documentation required for the extension

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions



































Clauses




























Relevant Industries

Banking & Finance

Real Estate

Islamic Finance

Property Development

Construction

Housing Finance

Commercial Property

Residential Property

Relevant Teams

Legal

Real Estate Finance

Islamic Banking

Compliance

Risk Management

Property Services

Credit Administration

Documentation

Corporate Banking

Retail Banking

Relevant Roles

Legal Counsel

Islamic Finance Specialist

Mortgage Officer

Real Estate Manager

Compliance Officer

Banking Relationship Manager

Property Finance Manager

Risk Assessment Officer

Sharia Compliance Officer

Senior Loan Officer

Real Estate Finance Director

Legal Documentation Specialist

Banking Operations Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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