Pakistan, like many countries worldwide, is booming in the property sector. The prices are only escalating. Investors are targeting places like Karachi, Lahore, Multan and Islamabad for property due to the prices valuing at million US$. In fact, a house like Gulberg with just one kanal is sold for US$200,000, with an increase by $300,000 for a two-kanal house, and the like. The property prices, compared to what they were 5 years back, have more than tripled. People are holding the properties for the price to move up even higher in future. But will the price balloon puncture in the near future?
Many people are entering into the market with buying properties. Investments are being made in projects that would take a few years for development. On the city outskirts, many housing complexes are forthcoming; the houses valued in lakhs. Still, people are not interested in selling them off. This is because a selling pressure is seen, the prices will deflate and there will be a sharp correction in property prices. Instead, people are opting for loans to enter the property market, but since the interest rates on these loans are high, and people are holding, and not selling the properties, there have been many cases of defaults. This is a major concern.
For buying a hew house, you need to make many decisions. Loan is the biggest decision here. Most people cannot finance a new house upfront so they invariably rely on loans from various financial institutions. The officer in charge of the loan will require you to bring various supporting documents to ensure that you have the ability to pay back the loan amount. A credit check is always done before extending a loan.
This credit check is a credit report that enabled the lender to have an idea of how well or otherwise you have been performing when it comes to clearing your debts in time. If there had been some general reason for the inability to pay the past loans, like leaving a job or falling sick, some companies do help you get your credit report back on the normal terms, and they extend you the loan. The approvals of loans take quite some time.
Most banks and other financial institutions ensure that you are able to render the loan repayment to them when the time comes. The loan officers will explain in details regarding some unfamiliar things that you might come across. In case of a mortgage, the contract is a long-term one between you and the lender, usually a bank, and the repayment must take place in an agreed period of time. In this case, the bank can exercise their right to take away the home from you if you are unable to pay back the loan. They can’t ask you to follow instructions set by them to maintain the house, but can claim the house as theirs incase of default. So this is an obligation between you and the bank that you will render the loan repayment well in time. The loan officers are always willing to do their bit to make sure that you get the best deal in business.
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