It is everyone’s dream to one day own your own home, be it an apartment or a house. Fulfilling your dream to own a home can be made easy using Home Loans. Whether you want to change from a smaller home to a larger one, moving from renting to owning or just are looking to renovate your existing home.
Home Loans are offered to both salaried individuals and business owners ranging from PKR 300,000 to PKR-50 Million, up to Maximum 85% (this can vary from case to case and bank to bank) of Home Value with a tenure ranging for 3 years to 20 years.
Depending on what your goal is, most banks offer various products to handle that specific goal:
Islamic Banks in Pakistan also offer this facility. They use one of two models: Diminishing Musharka or Ijarah. In Diminishing Musharka, the bank becomes the co-owner of your home and you eventually buy out the bank over a period of time. In Ijarah the bank buys the home for you and you pay the bank back over a period of time. In both Islamic and Conventional options you should closely pay attention to the items mentioned in our Things to Know (hyperlink) and Beware! Sections (hyperlink).
Home Loan application require a thorough evaluation of your ability to repay the loan, go through the section below to ensure you have the best chance of secure a Home Loan.
This is the process banks follow to judge your (eligibility) ability to repay your loan as well as your trustworthiness. There are different stages of a credit appraisal that you have to go through which vary from bank to bank.
Eligibility for Home Finance varies from one bank to the other. However a basic framework of eligibility is as follows:
Every bank has their own set of internal policies which govern what documentation is required for Home Finance, below are a few items common to all banks:
Getting a Home Loan is a major long term commitment. Before you sign up for one, you should make sure you have gotten the best deal possible. CompareBanks.com gives you all the information you need to make a decision that serves your needs best. You can quickly and easily compare rates, terms, and fees ensuring you get the Home Loan you want.
Always remember, taking too many loans will restrict your credit worthiness. Keep your credit score in good shape by making consistent repayments of any Loans / bills.
Most banks provide financing of up to Maximum 85% of the value of your home. You will need to cover 15% of the value of the home. However this amount will be paid directly to the seller
You and a blood relative or your spouse can be co-borrowers for the Home Loan. Banks have the facility to add the income of the spouses to increase the finance amount
You will have to pay processing charges, legal fees, Property evaluation charges, home insurance, and life insurance (If applicable).
The processing time differs from Bank to Bank usually your loan application can take 4 – 6 weeks to process, end to end.
You make your monthly payments through monthly instalments.
Yes, you can opt for early settlement; however, banks will charge you a fee in order to avail this facility. Make sure you discuss this with you Bank and are fully aware of the charges.
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I’ve been thinking about getting a home loan for a long time, I just didn’t have the time to call or visit banks to get all the information I wanted. I found out all I needed to know about getting a home loan from compare banks, I’m talking to 2 banks right now and will probably get my loan in another week or so - Ali Azfar - Islamabad
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