Mon. Apr 22nd, 2024
house financing in pakistan

Getting a Mortgage in Pakistan

You need to purchase a home but don’t have the money to do so. If that’s the case, there’s a remedy for you. Let’s take a closer look at the answer. House finance is the best option for people who want to buy a home but lack the funds. Let’s take a look at how Pakistani home financing works.

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What is financing?

Growth in populations, along with the government’s incapacity to provide low- and middle-income Pakistanis with affordable homes, has created a housing problem. The middle-class salaried class cannot purchase homes in urban regions because of the high cost of real estate. In a mortgage, a borrower is obligated to pay back a loan instrument guaranteed by the property of a specific piece of real estate. Mortgages are used by both businesses and individuals to acquire real estate without paying the total purchase price at once. If the lender does not already own the land, they must make regular payments on the lease over a certain period, plus interest. Assume he cannot pay back the debt. In this instance, banks or other borrowing facilities may force the occupants out of the property to sell it and pay off the original debt.

1st Step:

To begin, look for a lender that specializes in home equity loans. When it comes to financing contracts in Pakistan, practically all commercial banks—private or state-owned—are involved. The lending of houses is also handled by other institutions like MCB, UBL, and HBL. House Building Finance Corporation, a government-owned company, is a standout in this industry (HBFC). You have the freedom to choose any institution you like.

2nd Step:

Contact the financial institution you’ve chosen and apply for the house financing program on the institution’s authorized application form. In most cases, you’ll be asked to provide the following:

  • Computerized National Identity Card (CNIC)
  • An income certificate identifies the source of income, the quantity of revenue, and the volume of income.
  • Returns from FBR.
  • Status of residence.
  • Any further documents that the institution may require
  • A guarantee from the individual.

The organization would ask you for a little fee to expedite the application procedure. And it would take some time to verify the information you provided.

3rd Step:

As of right now, you have several options to choose from. The following are examples:

  • Depending on your needs, the institution would offer you a place to live.
  • There is no limit to where you can seek a home and have the institution pay for it.
  • If you want to build a residence on any piece of property, you can do it in any location. The institution will pay for all construction costs, as agreed upon.

Choose from the options above and then tell the lender or HBFC that you’ve made your decision.

4th Step:

A group of highly experienced professionals would evaluate the institution’s ability to lend you money. Your credit record, economic ability, and employment history will all be considered during the evaluation process. To have a good credit history, you must know how much money you have borrowed in the past and how long it took you to repay that money. You’ll be given a loan if you meet the criteria for being deemed a financially successful candidate.

You’ll have to pay a down payment to the banking institution, and the balance will be repaid in installments. The institution provides a timetable of monthly payments and installments that one should examine before agreeing to it. The bank has the right to get back your property and pursue legal action against you if you fail to make your payments.

A list of all the terms and conditions may be found in the agreement’s “Terms and Conditions” section. The possession of the property is handed to you once the final payment has been received in full. On the other hand, some financial organizations transfer ownership before the full amount owed has been paid.


Many people will be unable to afford formalized housing in the face of increasing development and the resulting increase in housing demand. As a result, resolving Pakistan’s housing problem would require a focus on the country’s house financing system. To stimulate the economy, it is essential to manage risks and regulate the lending sector and conduct targeted and financially appropriate policy measures. As a result of the issues facing the residential finance sector, authorities and the private sector must develop and implement targeted housing finance policies.

Author Bio

Muhammad Zaeem Khan, a creative writer, ardent to compose fine writings. Having vast experience in writing blogs, articles, descriptions, and in reviewing scriptures. Currently, works as sr. content writer with Sigma Properties & Marketing| Kingdom Valley.

By Manali

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