Role of Guarantors in Pakistani Real Estate

Guarantors are an essential aspect of the real estate industry in Pakistan. They act as co-signers, providing financial security for the property buyer, and offering protection to the lender. In other words, they guarantee the repayment of the mortgage loan in case the borrower defaults on their payments.

Why do you need a guarantor?

Most lenders in Pakistan require a guarantor when issuing a mortgage loan. This is because they want to ensure that the borrower is financially stable and can repay the loan on time. The guarantor provides additional financial security, which reduces the lender’s risk and increases the likelihood of loan approval.

Who can be a guarantor?

A guarantor can be anyone who meets the lender’s requirements. Usually, lenders prefer guarantors who have a stable income and a good credit score. Family members, friends, and business associates can all act as guarantors, provided they meet the lender’s criteria.

What are the responsibilities of a guarantor?

When you agree to become a guarantor, you are taking on a significant responsibility. You are agreeing to repay the mortgage loan if the borrower defaults. As a guarantor, you are also responsible for ensuring that the borrower makes their payments on time. If they fail to do so, you may be required to pay a penalty or face legal action.

How does guarantorship work?

The guarantor signs a legal agreement with the lender, which outlines their responsibilities and obligations. The guarantor’s income, assets, and liabilities are evaluated to ensure they can repay the loan in case of default. If the borrower defaults on their payments, the lender can take legal action against the guarantor to recover the outstanding amount.


In conclusion, guarantors play a crucial role in the Pakistani real estate industry. They provide financial security to the lender and increase the chances of loan approval for the borrower. Anyone can act as a guarantor, provided they meet the lender’s criteria. However, becoming a guarantor is a significant responsibility, and it’s essential to understand the obligations and potential risks involved.

We hope this guide has been helpful in understanding the role of guarantors in Pakistani real estate. For more information on this topic or any other real estate-related queries, please feel free to contact us. We’re always happy to help.

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