What is Mortgage?

A mortgage is basically a loan, acquired on certain terms and conditions, solely for the purpose of purchasing any expensive asset such as a car or a real estate property. This loan is usually attained as a fixed amount from the bank or a real estate mortgage lender, to be returned in due time without violation of any of the terms and conditions. Otherwise, the authorities are lawfully entitled to confiscate the property the buyer invested in.

In this article, we shall discuss mortgages for real estate.

“Home is where the mortgage is”

Eligibility for Mortgage

Before the bank or any real estate lender allows you to obtain a loan through their system they require some information regarding your monthly income, expenditure, or already existing assets. This is done in order to determine if the person applying for the loan is eligible for it or not based on their financial standing as well as if they could repay the loan later or not.

In case, the acquirer of the loan does not pay back the loan in due time, the lender can rightfully seize the property or even take legal action against the acquirer of the loan.  This is why the property attained through this loan is called collateral in legal terms.

What are the types of Mortgages?

Fixed-rate mortgage/Traditional mortgage

In a fixed rate or a traditional mortgage, there is a strictly fixed interest rate along with the loan that is due over a specific term of certain years. (could be 10, 20, 30 years, etc based on the contract and the commitment between the buyer and the lender). However, the charges of interest could exceed if the buyer takes longer to pay than the designated time. Nevertheless, the fixed mortgage gives the buyer an advantage that even if the real estate rates become higher in the market it does not affect their contract at all. The buyer would still pay the same amount as they initially decided.

Variable/Adjustable rate mortgage/ARMS

Adjustable-rate mortgages also known as Variable mortgages or ARMS do not have a fixed rate of interest. In fact, the interest rate could vary from time to time depending upon the situation and property rates of the real estate market as per every year/phase of payment. Inflation in the real estate world could cause a direct influx to the rate of interest as well as the total amount of loan acquired. In some cases, the Variable-rate mortgage offers a fixed interest rate and loan for some years (mostly 5) and for the rest of the years accommodates all of the variations in rates occurring in the market during those years. However, this type of ARMS could only be opted for if you plan to stretch your episode-wise loan payment over the course of many years such as 10-30 years.

“Step by step, place became property, property became a mortgage, and
mortgages became derivative investments.”

How do we benefit from Mortgages?

Investments like Real estate have always been deemed as an investment for the elite or people belonging to a higher socio-economic class in the financial hierarchal system of the country. In every country, real estate is the sector that exhibits a significant increase in GDP and helps boost the economy of the country. In a developing country like Pakistan where there is barely a small percentage of people who make it to that place on the ladder, it would be really hard to obtain that benefit from its people. Also, it significantly reduces the target market of realtors and real estate sellers. To tackle this issue the realtors have now devised this strategy of a mortgage or property loan. Precisely it’s a give and takes formula where the people belonging from an average socio-economic class are enabled to purchase real estate over time as per their convenience while the target market of the real estate sellers expands, furthermore helping the economy of the country too.

“The universe of mortgage lending has gotten to a point where there is a place for everybody”

Examples of mortgage investments in Pakistan?

In a developing country like Pakistan where almost every sector requires a lot of planning and is in a questionable state, real estate is the one sector that has been significantly booming by leaps and bounds throughout. The reason is that in Pakistan we have smart real estate enthusiasts who plan, strategize every step, and are ready for mitigation in case any problem occurs. Hence this is why the real estate market is still a soundly working sector in Pakistan.

If you are looking to invest through mortgage too you can check out these banks that can help you attain a loan.

  • JS Bank
  • Bank of Punjab

  • Alfalah

  • Meezan Bank

  • Bank Al Habib

  • Standard Chartered bank

  • Summit Bank

  • Al Baraka Bank

  • National Bank of Pakistan

  • Faysal Bank

  • Dubai Islamic Bank

  • Silk Bank

If you are looking for to acquire a mortgage loan in order to make your investment, you could most definitely consult the banks above. All of them have their own terms and conditions which you would have to abide by.

Now once you have got the loan to make the investment of your dreams, the question arises that, where to invest this money in order to fulfil your dream of a beautiful house.

Over the years our realtors have has launched some real estate schemes that work on the principle of mortgage to an extent. You pay them 15-30% initially as a down payment, there is a payment plan generated to cover the rest of the payment done episode-wise.

Here is a list of real estate investments that could help you fulfill the dream of attaining your dream house within your budget.

1.  Capital Smart City

Capital Smart City in Islamabad is a collaboration project between Habib Rafiq Private and Future Holdings Developments Private Limited. This state-of-the-art residential housing project happens to be the first Smart city of Pakistan and 4th in Asia. The infrastructure, location, amenities, basically all of its salient features make this a pro-investment for all the real estate enthusiasts and investors out there. Cherry on top the payment plan is convenient, economical, and very accommodative. Here are the respective segments of this investment along with their payment plans.

  • Harmony Park Block

2.  Lahore Smart City

After the immense success of Capital smart city, the FDH and Habib Rafiq (Pvt) Limited launched yet again another exciting real estate scheme for their eager clientele in the real estate market. The Lahore smart city.

The Lahore smart city(LSC) in a short period of time has gained massive popularity in the real estate world. Apart from offering residential plots in the most prime location of the city, sturdy luxurious, and astounding architecture, one major reason behind the success of the Lahore smart city LSC in a short span of time is its economical and affordable payment plan

Unlike most other real estate investments, it does not cost its investors to spend everything they own for just one investment.

Lahore smart city offers simple, convenient, and customized payment plans.

Lahore Smart City currently offers residential plots at affordable prices. This is the best opportunity to grab for having a future residence in Lahore. The Residential plots booking starts from a 10% down payment and they are offering a 3.5-year easy installment payment plan.

3.  Royal Orchard

Royal Orchard Multan is situated at one of the most prime locations of the city; surrounded by many important commercial areas. From installment plans on residential plots, workplaces, and even residential housing schemes, the Royal Orchard Multan is doing it all on immensely convenient customized payment plans with reasonable downpayment.

4.  Faisal Town

Faisal town is situated in the heart of the Capital of Pakistan, a newly developed sector F-18. Imagine living surrounded by the mountains and nature’s beauty in all its glory. Who wouldn’t want to live amidst such a wonderland that too with all the desired facilities, amenities, and everything that is required for a comfortable living. Now normally such an amazing location would cost you an arm and a leg to invest there but surprisingly not only does this place has affordable pricing but also comes with a convenient payment plan.

5.  Top City 1

Top City 1, another amazing project by Dynast Associate. Another well thought out and well-facilitated city in the suburbs of Islamabad comprising of 7 sectors. Ranging from small  5, 7, 8, 10 marla plots up to plots as big as 2 kanals and even farmhouses. The top city’s location is both easily accessible to Rawalpindi and Islamabad natives as it is situated at the junction of Motorway M1 and M2. The payment plan is installment-based and super convenient.

6.  Park View City

Park View City is a beautiful city that is nestled amidst the mountains and yet not deprived of any of the modern-day facilities. Strong and sturdy architecture, infrastructure, all the essential facilities available required to have a luxurious living in a moderate and convenient installment-based payment plan.

There are currently many such feasible options for attaining a mortgage as well as the right options to invest that mortgage in. We hope you make the right choice for yourself and your family.