Are you the one wandering around the classic buyer’s conundrum: should I buy or build? well, the choice is merely yours! However, analyzing the property market on an extended scale, we came to know that the majority is inclined towards buying a property instead of getting it build from scratch. Talking about buying a home, it is commonly observed that the majority are trapped under the financial constraints and spend all of their lives trying to save the damn bucks. This is because they are unaware of the home loan facilities running throughout the globe.
Talking about Pakistan, being a developing state, it bears incredibly higher property prices and not everyone in the country can buy a dream home. Purchasing is a whole new story, the majority cannot even imagine it except for the allied class. However, no offense that both Islamic and conventional banks have taken certain steps to change the game and make it easier for the majority to escape from the renting shackles. That is what we call, home financing!
Home financing is slowly and gradually gaining wider attention across Pakistan. It is NOW helping many potential buyers to make one of the biggest decisions of their lives. Due to the fact that Pakistan’s real estate is expanding rapidly with foreign property builders making a depute in the state, the banks of Pakistan had no choice instead of rendering a simplified home inclined to upgrade the state’s economy.
home financing became common in Pakistan as to compliment the accelerating property market with the sole aim to boost the economy.
However, the majority is still unaware of the process and the criteria. This post is to help readers know as much as they want to about:
Analyzing the emerging trend of home financing, we figured out that there is a certain eligibility criterion for acquiring a loan in Pakistan. It generally revolves around a few things, i.e,
However, all of these factors are guarded by two other aspects i.e, the type of the loan. There are generally two prevailing types of shorter time loans and longer time loans.
Banks Rendering Loans in Pakistan
The banking sector of Pakistan is dense and acquires some strict rules and conditions for every single thing. As far as the loans are concerned, so different banks bear different criteria and the standard varies from bank to bank and not from customer to customer.
Within this post, we have tried our best to summarize EVERYTHING ABOUT HOME LOANS from the leading banks rolling money around the state.
Here is a detailed list of the banks giving home loans across Pakistan:
Analyzing the overall banking sector of our Pakistan, it has been widely observed that standard chartered, HBL, and Bank Alfalah are hovering the sector with the best loan standards accompanied by flexible interest rates and pay-back time personalization. Have a look at their standard criteria:
|Description||House Purchase||House Renovation|
|Minimum salary||PKR 30,000||PKR 20,000|
|Service Duration||1 year||1 year|
|Financing Amount||Up to 30 million||Up to 3 million|
|Repayment tenor||1 to 20 years||1 to 10 years|
|Minimum age of the Borrower||Greater than or equal to 25 years||Greater than or equal to 25 years|
|Description||Outright Purchase||Home Improvement/ Renovation|
|Loan Tenure||3 years to 20 years||3 years to 20 years|
|Loan Amount||Rs. 300,000 – Rs. 15,000,000||Rs. 300,000 – Rs. 5,000,000|
|Maximum Financing Amount||85%||70%|
|Service Duration||1 year for salaried and 2 years for businessmen||1 year for salaried and 2 years for businessmen|
| Property Lease|
(years remaining at the time of loan maturity)
|5 years||5 years|
|Description||House Purchase||House Renovation|
|Minimum salary||PKR 50,000||50,000|
|Service Duration||2 years for permanent and 3 years for contractual employees||2 years for permanent and 3 years for contractual employees|
|Financing Amount||Greater than or equal to 2 million||100% of the construction cost|
|Repayment tenor||3 to 25 years||3 to 25 years|
|Age eligibility||23 to 60 years||23 to 60 years|
As stated earlier, the eligibility criteria for a home loan varies from bank to bank. However, generally, there are certain things that are common for every financial institution pertaining to the eligibility criteria of home financing and they are as follows:
Digging out further, the banking sector of Pakistan is rumored to be strict and that is justified with the fact that the above stated four aspects are not all that is considered. Instead, credit histories and a few other things are also inspected.
Moreover, right after the eligibility criteria, there comes income verification. Here is a list of few documents that are inspected straight away to investigate the credibility of the information granted. This is merely to evaluate whether an individual has sufficient resources to pay back the taken amount or not.
Last but not the least, here is the list of some other legal documents that are requested to be shown to finalize the deal.
In a nutshell, home financing is rapidly evolving in Pakistan but it is not as simple as it sounds. The banking sector has strict rules at each step to validate the availability of sufficient funds and resources to pay off the fluctuating interest rates. However, interest rates are totally dependent upon KIBOR, the bank’s margin, profitability, and the amount borrowed. Last but not least, these rates are revised half-yearly for the best benefit of both, the borrower and the bank.