Frequently Asked Questions

1. How is this financing facility different from Conventional mortgage / House finance?
   Under conventional mortgage / House finance, loan is extended to the client and the bank does not share in the risks and rewards of property being financed. Client has to pay periodic interest based payments on the outstanding amount. On the other hand, in Islamic mortgage / House finance is based on the concept of Diminishing Musharaka. Bank creates joint ownership of property with the client and shares in the risks and rewards to the extent of its ownership in the property. After the joint ownership is created, bank leases out its share in property to the client and client pays the bank its rent. Along with the payment of rent, Client also makes regular payments for buying the banks share in property. These periodic payments reduce over time since total share of client in property grows with each payment. Once all the share of bank is bought, client becomes the sole owner of the property.
   
   
2. Which branches of the Bank offer this product?
   All branches of the bank are entitled to offer this product
   
   
3. What options are available under Al Baraka Housing Finance?
   Following five options are available under Albarka Housing Finance:
   • Purchase of House / Flat
   • Construction of house on a plot owned by the Client
   • Purchase of the Plot and Construction of House
   • Renovation/ improvement of existing property
   • Asset Transfer Facility
     
     
4. What is Asset Transfer Facility?
   You can transfer your house loans / mortgages from other conventional bank / DFI’s and Islamic banks to Al Baraka. These loans can be for any of the following purposes:
   • Purchase of constructed house / Flat
   • Construction of house on a plot owned by the Client
   • Purchase of the Plot and Construction of House
   • Renovation of house / Flat
   All conditions / formalities stipulated for the above mentioned categories apply, as the case may be.
   
   
5. What are the general eligibility criteria?
   Applicant should be Pakistani National with at least 25 years of age at the time of start of financing while at the time of maturity the age of the client should not be beyond 60 years. For more details please refer to the section on Eligibility Criteria.
   
   
6. Can the income of spouse / parent be counted towards the income requirement for this facility?

Yes

7. What is the processing time of application?
   On an average application processing period is up to 20 days from the day of receipt of all required documents/information by you.
   
   
8. Does the bank require any security for providing this financing facility?
   Yes, you will be required to create equitable / registered mortgage of house / property to be purchased / constructed etc. Moreover, token registered mortgaged can also be taken where required along with personal guarantee.
   
   
9. What is the frequency of payments / installments under this scheme?
   The frequency of payments is monthly. You will make equal monthly installments comprising of monthly payment against usage and the payment of unit price to Al Baraka in the form of post dated cheques.
   
   
10. In case, during the tenure I require more funds from the bank than initially agreed upon, Can I get enhancement in facility?
    You can request for enhancement in facility during the tenure in either cases:
    • Cost of construction is increased and you need more funds for completion of existing work
    • You want extension of construction beyond the original construction plan
    • You want to purchase another plot for construction adjacent to existing plot
      
      
11. Do I have the option of premature termination / settlement of the contract?
    You have the option of early purchase of banks share in the musharka property by acquiring the entire remaining musharaka units at their applicable buyout price, subject to completion of at least one year.