Home Loan Facts About an Under Construction Propertyby Finway Capital Empowering People Financially
Having an own house in cities like Delhi is a dream come true for many people out there. But is it very easy to get a house in Delhi! Of course not, Delhi is the capital city of India and the pricing of the property there is quite high. This is the reason why most of the people prefer to get a home loan in Delhi.
This home loan is a pretty good option, and half of the prospective buyers plan to invest in the properties that are under construction. The buyers are thinking that investing in the properties under construction is a better option.
If you are taking a home loan for under construction property, then you have to be aware of the following facts.
EMI Payments on Sanctioned Amount
Generally, for under construction property, the banks disburse amount in tranches to the builder. The buyers have to pay the EMI on the amount that was sanctioned for the builder but not for the amount that has been disbursed.
Simply put, if the loan amount that is sanctioned for you is 70 Lakhs and the amount that has been disbursed is only 20 lakhs, you are bound to pay an EMI for 70 lakhs rather than 20 lakhs. This makes sense financially. As there is a high construction risk involved for both banks and buyers, the banks have made some stricter rules these days.
However, the buyers usually invest in these under construction homes to stagger the loan repayment. The huge EMI outgo repayment right from the first month will surely burn a hole in the buyer's pocket. If they are living in a rental property, the situation will be even worse.
Higher Liability on the Buyer if the Project is Delayed or Defaulted
If the project is either delayed or defaulted, the buyer has to repay the interest and the principal amount of the disbursed amount to the builder.
Hence it is important for you to consider the reputation and track record of the builder so that the project gets completed right on time. It will be better if you go to a builder who has been in the market for a lot of time and has huge expertise. This way you will be at lower risk.These two facts are very important for you to know if you are taking any loan against the properties that are under construction.
Created on Apr 30th 2019 07:01. Viewed 314 times.