House Leasing in Pakistan – How does it Work?

In the last decade, the real estate sector got a boom, the property price has risen at higher rates. And nearly, it became impossible for a middle-class person to buy a home. But leasing is an option that can help you make this dream come to life. In Pakistan, there are many institutions providing house lease services.

Besides commercial banks, many House Building Finance Companies provide lease financing to low-income households. Jointly owned by the State Bank of Pakistan and the Government of Pakistan, House Building Finance Company offers financing facilities for construction, renovation, reconstruction, and purchase of houses. Additionally, there is a proper leasing structure by this company that other banks also follow.

Further the lease plan can be obtained for three to twenty years in Pakistan. It’s up to you what duration you are comfortable with depending on your income. Let’s discuss this whole leasing structure of Pakistan in detail. How does it work?

Eligibility Criteria for a House Leasing

Age:

To buy a house on lease basis, the minimum age of the applicant should be 18 years and maximum of 60 years. In the case of self-employed persons, the maximum age is 65 years.

Income:

Next, the applicant should be employed and should have sufficient income to meet three to twenty years leasing plan criteria. Further, the proof of income (tax returns or salary slips) must be submitted with the application.

Property:

In case you apply for the construction or reconstruction funds of your house, the proof of ownership of land or existing house should be provided with the details of the construction requirements.

Purchase of House:

And if the lease application is for the purchase of a house. The current owner whom you want to purchase should have a clear title to the property. Also, the house or flat should not be more than 45 years old. As well as the house leasing facility is only available in urban areas where all the basic amenities of life are available.

Down Payment:

You need to pay 30% of the total value of the property as a down payment.

Loan Repayment:

The total amount of the house lease loan is divided into monthly payments. When the whole amount of loan is repaid by the applicant. He/she becomes the sole owner of the property and the title is transferred completely to him/her.

Units in House Leasing System:

In the lease process house units are basically the title of ownership divided into several parts and assigned an amount. And the purchaser obtaining a loan should purchase all the units on a monthly basis. This payment is added to the monthly lease payment. As you complete the payment of each unit, you will get the title of the house.

Read More: A Guide to Property Registration Process in Pakistan – Pakistan

Pros and Cons of House Leasing

Just like anything, leasing has its own advantages and disadvantages. Let’s have a look at both.

Pros of leasing house:

One of the greatest advantages of house leasing is that you can have your own house in a very comfortable way. With a rental house, it is not possible.

The number and the rate of installments decreases steadily and it seems like you are paying the rent of your home.

Upon completion of payment, the title is transferred without any delay.

Cons of leasing house:

You have to arrange the down payment which is 30% of the total value of property.

In case of short-term lease, the rate of lease payments will be higher.

A Final Word

Lastly, we can conclude that acquiring a home through house leasing can be a good choice. Not only will it help you save you from the monthly rentals. As well as you can have your own home easily further, leasing a house does not mean you buy it for personal use only. You can also buy a house on lease and then rent it to make a source of your passive income. With sufficient income there is no other option as suitable as house leasing.

In addition, in order to apply for a loan, you must have a house in mind that you will mention in your loan application. In Islamabad, We Rise Estate may help you get a dream house.

Read More: Future of Bahria Oriental Garden Islamabad – We Heights