Document background
The Mortgage Loan Letter is a critical document in Pakistan's property financing landscape, serving as the official communication of loan approval and terms between a financial institution and a prospective borrower. This document is typically issued after the successful completion of the loan application assessment process and before the execution of detailed mortgage documentation. The letter outlines the fundamental aspects of the approved financing, including loan amount, tenure, interest rates (or profit rates for Islamic banking), and key conditions. In the Pakistani jurisdiction, the Mortgage Loan Letter must comply with various regulations, including the State Bank of Pakistan's guidelines, the Transfer of Property Act, and where applicable, Islamic banking principles. The document is used to provide borrowers with a clear understanding of their loan terms and serves as a reference point for preparing subsequent detailed mortgage documentation. It also helps ensure transparency in the lending process and provides a basis for both parties to proceed with the property transaction.
