Different Payment Plans by Builders
Today most of the Builders are offering new and innovative payment plans. It is upto the investor which suits him the best depending on his Financial Status.
1. CONSTRUCTION-LINKED PLAN
In this option, the first 2-3 instalments are calendar based and subsequent payments are linked to progress in construction. You may pay 5-10% at the time of booking, another 5-10% within three months and 20% in six months.The remaining 60-70% is paid when the construction reaches predetermined milestones.
Who should go for it Construction-linked plans suit buyers who are not in a position to make a huge financial commitment. Banks usually give two kinds of loans for such plans.First, the loan is for the initial contributions and only pre-EMIs are charged.The loan increases with each instalment to the builder and the pre-EMI amount goes up. Regular EMIs start only after the final disbursement has been made. Since the pre-EMI pain is lesser in earlier years, this suits buyers who expect their income to rise in the next few years. They can also use the pre-EMI period to repay loans taken for the downpayment. In the second type, EMIs are based on the entire loan amount sanctioned even though only a portion is disbursed. The interest is very small in initial years and a bigger sum goes into repaying the principal.
2. 30:70 SUBVENTION PLAN
Much like a construction-linked plan because the buyer makes a small downpayment of 10-30% at the time of booking. The difference is that he also takes a loan for the remaining amount, though the builder pays the EMIs till possession. The lender pays the builder construction-linked payments on behalf of the buyer. For the buyer, EMIs start either on possession or after a specific period. Such schemes are not all that great. The interest cost absorbed by the builder during the subvention period is passed on to the customer by way of higher prices. The price per sq. ft under this option is higher than what you would pay under construction linked plan.
Who should go for it - Just like construction-linked plans, these suit buyers who don't have too much surplus cash. However, don't get enticed by offers of small downpayment. If construction gets stuck, there is a high chance that the builder will default on interest payment to the bank.
3. SUBVENTION WITHOUT LOAN
Here, instead of the bank, the builder funds the purchase. While the absence of the EMI might seem like an advantage, this option has its shortcomings. When you take a loan from a bank, it does its due diligence. The buyer benifits from this research. Buyers also need to make sure that all approvals are t in place and work is going on smoothly .
Who should go for it - This suits HNI buyers who don't need loans. If you have cash and can make a larger downpayment, builders would be willing to offer higher discounts.
4. INTEREST WAIVER ON HOME LOAN
These schemes are for projects that are ready for possession or nearing completion. The waiver could be for 1-3 years.For instance, though home loan rates are close to 9.5%, some builders have tied up with lenders to offer loans at 7.5% for three years. Most of the tie-ups are with NBFCs.
Who should go for it - Since interest rates are expected to come down, instead of opting for such schemes, bargain with the builder to lower the price of the property.
5. ASSURED RENTALS
Another innovation is the assured rent offered by builders to a buyer who makes the full payment. This can be for a fixed term of 2-3 years or till possession. The rent is usually 1% of the price of the property . If you buy a property worth `50 lakh, the builder will give you 36 post-dated cheques of `50,000 each.This means a return of 12% on investment. After all, you are paying 9.5% on a housing loan. By the time you get possession, the price of the property would appreciate by at least 15-20% to `58-60 lakh. The catch is the builder has effectively taken a loan at 12% through the buyer. Here, the liability of timely repayment rests with the buyer, not the builder. If the buyer misses an EMI, the bank will come after him. If the builder reneges on the agreement, the buyer can take him to court. The reality is that if the cheques bouncing, there is little you can to do to recover dues.
Who should go for it - This option is useful because it takes care of the EMI for 2-3 years. However, be sure about the builder's credentials before you sign the Agreement.
Thanks and Regards
In this option, the first 2-3 instalments are calendar based and subsequent payments are linked to progress in construction. You may pay 5-10% at the time of booking, another 5-10% within three months and 20% in six months.The remaining 60-70% is paid when the construction reaches predetermined milestones.
Who should go for it Construction-linked plans suit buyers who are not in a position to make a huge financial commitment. Banks usually give two kinds of loans for such plans.First, the loan is for the initial contributions and only pre-EMIs are charged.The loan increases with each instalment to the builder and the pre-EMI amount goes up. Regular EMIs start only after the final disbursement has been made. Since the pre-EMI pain is lesser in earlier years, this suits buyers who expect their income to rise in the next few years. They can also use the pre-EMI period to repay loans taken for the downpayment. In the second type, EMIs are based on the entire loan amount sanctioned even though only a portion is disbursed. The interest is very small in initial years and a bigger sum goes into repaying the principal.
2. 30:70 SUBVENTION PLAN
Much like a construction-linked plan because the buyer makes a small downpayment of 10-30% at the time of booking. The difference is that he also takes a loan for the remaining amount, though the builder pays the EMIs till possession. The lender pays the builder construction-linked payments on behalf of the buyer. For the buyer, EMIs start either on possession or after a specific period. Such schemes are not all that great. The interest cost absorbed by the builder during the subvention period is passed on to the customer by way of higher prices. The price per sq. ft under this option is higher than what you would pay under construction linked plan.
Who should go for it - Just like construction-linked plans, these suit buyers who don't have too much surplus cash. However, don't get enticed by offers of small downpayment. If construction gets stuck, there is a high chance that the builder will default on interest payment to the bank.
3. SUBVENTION WITHOUT LOAN
Here, instead of the bank, the builder funds the purchase. While the absence of the EMI might seem like an advantage, this option has its shortcomings. When you take a loan from a bank, it does its due diligence. The buyer benifits from this research. Buyers also need to make sure that all approvals are t in place and work is going on smoothly .
Who should go for it - This suits HNI buyers who don't need loans. If you have cash and can make a larger downpayment, builders would be willing to offer higher discounts.
4. INTEREST WAIVER ON HOME LOAN
These schemes are for projects that are ready for possession or nearing completion. The waiver could be for 1-3 years.For instance, though home loan rates are close to 9.5%, some builders have tied up with lenders to offer loans at 7.5% for three years. Most of the tie-ups are with NBFCs.
Who should go for it - Since interest rates are expected to come down, instead of opting for such schemes, bargain with the builder to lower the price of the property.
5. ASSURED RENTALS
Another innovation is the assured rent offered by builders to a buyer who makes the full payment. This can be for a fixed term of 2-3 years or till possession. The rent is usually 1% of the price of the property . If you buy a property worth `50 lakh, the builder will give you 36 post-dated cheques of `50,000 each.This means a return of 12% on investment. After all, you are paying 9.5% on a housing loan. By the time you get possession, the price of the property would appreciate by at least 15-20% to `58-60 lakh. The catch is the builder has effectively taken a loan at 12% through the buyer. Here, the liability of timely repayment rests with the buyer, not the builder. If the buyer misses an EMI, the bank will come after him. If the builder reneges on the agreement, the buyer can take him to court. The reality is that if the cheques bouncing, there is little you can to do to recover dues.
Who should go for it - This option is useful because it takes care of the EMI for 2-3 years. However, be sure about the builder's credentials before you sign the Agreement.
Thanks and Regards
Amar Jadhav 9323830029
LIFESTYLE PROPERTY CONSULTANTS
204, Auto Commerce House,
Nana Chowk, Nr Kennedy Bridge,
Grant Road (West), Mumbai 400007
Landline Number Tel : 022-23888744
No comments:
Post a Comment