*Rate shall be reviewed on yearly basis on each anniversary of finance by taking into account the then prevailing KIBOR. Schedule of Charges
- You are a Pakistani National Identity Card Holder
- Age at the time of application between 23 years to 55 years at the time of application, subject to maximum age of 60 for salaried and 65 for other types of customers, at the time of maturity of finance.
- Minimum take home income of Rs 50,000- per month from all sources.
- The financing amount is at least Rs.2 million (Rs. 20 lacs) or above.
- If you are a non-resident salaried individual you must earn a minimum gross monthly verifiable income equivalent to USD 5,000.
- You must be a permanent employee, currently employed with total employment experience of at least 2 years.
- If you are a professional contractual employees (bankers, engineers, doctors, architect etc), you must be currently employed with total employment experience of at least 3 years.
- If you are self employed with a stream of income generated from property rent/return on fixed deposit /DSC/SSC, you must have had the source of income for at least last 6 months.
- If you are a businessman, you must be running a business for at least 5 years with a satisfactory track record of either an individually owned or a family business.
- The property you want to mortgage should be located in Karachi, Lahore, Rawalpindi or Islamabad.
Quantum of financing is dependent on the monthly income as well as the existing consumer financing availed by the customer and the volume of domestic/kitchen expenses. These factors are used to determine your affordable monthly repayment capacity within the guidelines and limitations defined by SBP as well as the Bank’s internal policies.
Any of your blood relations (major) and spouse may be made a co-borrower to the financing. (MPP may be proportioned between the customers’ income for loan eligibility).
The following documents are required to be submitted by an applicant along with the completed application Form.
- 2 recent passport size colored photographs. – Copy of Computerized NIC (original to be shown at our office).
- Bank Statement for the last 6 months (original or attested).
- Copies of complete chain of title documents of the property being offered (if identified).
- Processing fee check / pay order favoring “Bank Alfalah Ltd.
- Life Insurance (MPP) and property insurance (PI) forms.
- Letter of understanding.*
Additional documents for salaried resident Pakistanis
- Salary Certificate (original) from the employer, showing the gross salary, deductions and length of service.
- Latest Salary Slip / Pay Slips duly attested by the HR department
- Employment Verification Form signed by the employer.
- Salaried Director – Copy of Form 29 / Form A.
Additional documents for salaried Non-Resident Pakistanis (NRPs)
- Copy of Pakistani Passport valid for at least next 6 months & NICOP attested from Pakistani Consulate /Employer’s HR Manager (BAL’s representative office where available can also attest the documents to facilitate the transaction).
- Copy of Contract / Work Permit / Iqama / Residence Permit or any other document evidencing customer’s stay in abroad.
- Copies of last 3 years Tax Returns (not applicable for Middle Eastern & other countries where tax is not mandatory or tax exemption is held)
- Personal Guarantee of a resident Pakistani as acceptable to the Bank
- The customer shall be required to open an account with the Bank for liquidating his home finance liability through foreign remittances by using normal banking channels
- An affidavit stating that the sale proceeds of the property on dis-investment shall not be repatriated in foreign exchange or for credit to a Foreign Currency Account of the customer
Additional documents for Businessmen/Self-Employed Individuals (as applicable)
- Copy of current professional association membership / trade body membership certificate (if applicable).
- Deed of Partnership + Undertaking & NOC as per Bank format.
- Sole Proprietorship Letter / Certificate from customers Bank.
- Copy of latest Form 29 duly attested by the Company Secretary.
- Letter from company secretary confirming either the status and share-holding or remuneration (where applicant is a Director / paid Director of company).
- Copies of last 3 years Income Tax Returns and / or Assessment orders.
** Documents required to be attested by Pakistan Embassy/Consulate/Notary Public in the respective employment country (For expatriates only). For Pakistani Residents, only original documents should be submitted.
NOTE : The Bank may require any further document(s) in the process of approval & disbursement of requested facility as the situation so requires to comply the bank’s policy and SBP’s instructions.
Mark-Up Rate Structure
The floating rate option is a combination of a base rate and Bank margin – the base rate generally used in similar financing products is 1 Year – i.e. the Karachi Inter-Bank Offered Rate (KIBOR *) as prevalent at the start of every month.
Current rate structures are as follows:
Resident salaried customers: 1 Year KIBOR + 3.50% = applicable mark-up rate
Other customers: 1 Year KIBOR + 4.50% = applicable mark-up rate
Applicable rate will be the rate prevailing at the month of booking and subsequent anniversaries. These rates are revised annually and applicable installments are conveyed through a yearly repayment schedule. Any change in rate is subject to the change in KIBOR in the anniversary month.
* KIBOR is defined as the average rate “ask side” for a single year tenure as indicated on the SBP website.
Your life and property are insured to the extent of the outstanding principle liability and structure value respectively. The insurance companies upon receipt of prescribed documents settle all the claims in line with the terms of the insurance arrangement made with them.
If you have an existing life insurance policy equivalent to at least the financing amount from an insurance company acceptable to the bank, this can also be endorsed in favor of the Bank.
All the other charges shall be applied as per the Schedule of Charges.
Process flow of application
- We provide you with all the information you need about Bank Alfalah Home Finance. This can be through a face-to-face meeting with our Relationship Officer or over the telephone or through mail / email.
- You complete the application form and submit it to us, together with the required documents to give us basic information about your sources and quantum of income as well as the amount of funding you require.
- Once you have decided on the amount of funding you require and finalized the property, you can provide us with the property documents.
- The Bank will make some inquiries about your financial position/ circumstances.
- We carry out a valuation of the property and verify your sources of income.
- Once we have processed your case and it is approved, we will send you an offer through a “Facility Advice Letter”.
- You sign the Facility Advice Letter and return it to us.
- Our Documentation Control Center will get in touch with you to complete Finance & Security documentation including legal opinion on the title documents of the property and also the life (Mortgage Protection Plan) & property insurance.
- You sign the Finance Agreement and Charge documents.
- A Bank representative will accompany you to the Registrar’s office on the appointed date (for purchase transactions only) with our check against the financing for conveyance of the property – thereafter, your home finance begins.
For your convenience, the following options are available to make the monthly repayments easier by their due date:
- 12 post dated checks to Bank Alfalah as per the relevant schedule
- Cash deposit in your “Repayment Account”* with Bank Alfalah
- Check deposit in your “Repayment Account” with Bank Alfalah
* Unique repayment account is a deposit account wherein funds are to be made available on or before the due date for repayment of your monthly installment – this is conveyed to you upon disbursement of the loan.
Frequently Asked Questions
The Bank provides financing options of plot purchase & construction of home purchase of completed or semi completed house, construction / completion of construction, renovation/improvement in existing property and transfer of a consumer house loan from another lender.
Salaried or self-employed business person/professional with a regular, stable and verifiable income stream can apply for the loan.
What is the minimum income required to apply for a Home Finance?
A monthly verifiable net income of Rs. 50,000 for resident Pakistanis and a monthly income equivalent to USD 5,000 for non-resident Pakistanis is required.
What is debt to equity ratio? Do I have to make any down payment for this loan?
The Bank finances up to 70% of the property value assessed by the evaluator; the remaining amount is to be injected/contributed by the customer.
Where do I check which properties are being financed by the Bank?
There is no such list, the customer selects a residential property in the market, does his negotiations and then applies for financing for the same. If the property is not acceptable to the Bank for financing, the loan is declined. The Bank is not bound by any sale commitment that the customer has made with the seller.
Is it possible for two people to jointly apply for Home Finance?
Yes, a blood relative and spouse can be made co-borrowers for the loan, subject to fulfillment of certain conditions.
Can non-resident Pakistanis apply for the facility?
Yes, expatriate nationals are eligible to apply as well.
What is the mark-up rate on Home Finance?
Currently, Home Finance offers a floating (variable) mark-up rate only which is calculated on the basis of the prevailing 1 year Karachi Inter Bank Offer Rate (KIBOR), plus Bank Margin which differs depending upon the type of customer. This mark-up rate is revised each year.
Are the rates negotiable?
No, these are fixed rates for all types and sizes of financing.
What do I have to pay in addition to mark-up on the loan?
You will have to pay initial charges for application processing, appraisal, income estimation and legal opinion on property; these are non-refundable. In addition, Insurance premiums for life and property insurance for the first year are to be paid in advance. For the remaining years these are built into the repayment schedule as per the cover provided by the Insurance Company.
In which cities do you finance properties?
Properties located in Karachi, Islamabad, Rawalpindi, Lahore, Faisalabad and Multan will be considered for financing. Please contact us for further details
What should be the minimum value of the property?
Rs 5 million (Rs. 50 Lacs) and above.
Can I take the loan against commercial property?
No, Home Finance is only allowed for residential properties.
How much time will it take to get payment against my loan?
The loan application is processed upon the submission of your complete documentation and information to the Bank’s satisfaction. If the loan is approved then all legal formalities related to the property are to be completed. Subsequently upon your final advice for payment in coordination with the seller, the loan will be disbursed.
How do I repay the loan?
You can repay the loan either through monthly installments or through balloon payments allowed during a year or making an early settlement after paying the applicable penalty.
What is the repayment procedure ?
A non-checking repayment account is opened for borrowers. The borrower can easily deposit his/her monthly installments in this account through any Bank Alfalah branch. The Bank shall however receive 12- post dated checks for the first year in order to deduct monthly installments.
Can partial payments be made for Home Finance during the tenure?
Yes, borrowers are allowed to make balloon payments. Terms and conditions apply to such balloon payments. Please refer to our Schedule of Charges to view our current terms and conditions.
Can the loan be repaid before the date of maturity?
Yes, Home Finance can be settled before the date of maturity. However, certain charges apply as per the Bank’s Schedule of Charges.
Are MPP & PI (insurances) compulsory?
Yes, these are mandatory for each customer
Can I apply for more than one type of facility simultaneously?
Yes, that is allowed; provided the purpose is not business and moreover that the combined amount of the two facilities availed falls within your overall limit.
Is there any Income Tax Rebate available to Home Finance borrowers on their taxable income, on account of their mark-up payments?
Yes! there is rebate against the amount of the mark up paid during the tax year.
Lastly, please convince me in brief as to why I should avail the Home Finance facility from Bank Alfalah in particular, when it is more or less a standardized product offered by so many other banks in the financial market?
1. Alfalah Home Finance covers a spectrum of financing requirement i.e. Home Buyer; Home Construct; Plot Purchase + Construct, Home Improver & Balance Transfer Facility (BTF) from another lender bank in order to provide you with customized options.
2. It is one of the cheapest in cost (mark-up) options, not to mention the quickest to process.
3. Bank Alfalah is the leading bank in the market offering this product.
4. As per the Bank’s policy, both the financed property & the loan (outstanding) itself are insured at a very nominal/affordable cost. This hugely takes away the worries of the bereaved family in case of damage to the property or loss of life/major limb of the borrower due to natural causes ( who in most of the cases happens to be the main/lone bread earner of the family).
5. Bank Alfalah offers you an attractive Home Finance limit of up to Rs. 50 million in large cities including Karachi, Lahore & Islamabad, whilst for the rest of the authorized cities/locations we offer a reasonable sum of Rs. 25 million.
6. Title documents of the property to be financed are thoroughly examined by legal experts, which reduces the hassle for the borrower(s) and reduces risk of any possible future issues regarding legal deficiency etc. in the property/security.
Karachi8th Floor, Business Avenue P.E.C.H.S. Block-6 Shahra-e-Faisal, Karachi Tel: 021-34324284 – 34324291 Fax: 021-34324241-42
LahoreConsumer Finance CentreFB-6 Awami Complex, 1-4 Usman BlockNew Garden Town, Lahore042-35888630-39, 042-35940458-9
IslamabadI-8 Markaz,Islamabad Tel:051-4864714 – 4864708 Fax:051-34864708
Eligibility for Expatriate Pakistanis
- You are a Pakistani national (holder of valid Pakistani Passport & NICOP or CNIC)
- Your age should be between 23- 55 years when you apply.
- The home finance facility will be extended to those Expatriates who do not own immovable property outside Pakistan.
- The home finance facility will be for purchase of property for residential purpose only and not for any commercial use.
- Verifiable continuous inflow of minimum gross annual income of US$ 60,000 & AED/SAR 180,000 or equivalent respectively in tax paying & non-tax paying countries.
- No un-explained delays/defaults towards repayment of current/ past consumer financing’s from any Bank both in Pakistan and abroad.
- Affordability of financing within Bank’s acceptable limits.
- If you are a salaried individual, you must have a minimum continuous service of 2 years (not necessarily with the same employer).
- If you are a self employed professional, you must be practicing and conducting business for at least 3 years.
- Bank reserves the right to refuse financing for any reason. Some of the related important aspects are given below.
- We may finance upto 70% of the assessed value of the property that you intend to purchase (value is independently assessed by our valuators).
- The approval would be subject to the satisfactory Legal Opinion of the property to be financed.