Can I buy a house with EMI?

Wondering how to buy home on EMI? You can buy a house in India using the Equated Monthly Installment (EMI) option. In fact, EMI is one of the most common methods used by individuals to purchase homes, especially when they cannot afford to make the full payment upfront. Scroll down to get the best tips on how can you purchase a house on EMI easily.

How to Buy House on EMI?

Here's how buying a house with EMI works in India:

• Most people opt for a home loan from a bank or a financial institution to finance the purchase of a house. The loan amount is disbursed by the lender, and you agree to repay it in monthly installments over a specified period, which is the loan tenure.

• While the loan covers a significant portion of the house's cost, you typically need to make a down payment upfront. The down payment amount varies but is usually around 10% to 20% of the property's value.

The Equated Monthly Installment (EMI) comprises both the principal amount (the loan amount) and the interest charged by the lender. The EMI amount is calculated based on the loan amount, interest rate, and tenure using a standard formula.

The loan tenure can range from a few years to several decades, depending on the terms offered by the lender and your repayment capacity. Longer tenures result in lower EMIs but entail higher total interest payments, while shorter tenures have higher EMIs but lower overall interest costs.

• You need to make the EMI payments regularly every month as per the agreed schedule. Missing EMI payments can attract penalties and affect your credit score.

• Buy a house in installments with a home loan involves legal documentation, including the loan agreement, mortgage documents, and property-related paperwork.

• While the property is mortgaged to the lender until the loan is fully repaid, you have full ownership and possession rights. Once you complete the repayment of the loan (including interest), the property's ownership is transferred entirely to you.

Buying a house with EMI allows you to spread the cost of the property over time, making homeownership more accessible to many individuals. However, it's crucial to carefully assess your financial situation, choose a loan tenure and EMI amount that you can comfortably afford, and ensure timely repayment to avoid any financial stress or penalties.  

This is how to buy home on EMI.

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Yes, you can definitely buy a house with EMI. You should achieve your objective of purchasing your ideal home, but careful planning is necessary if you truly want to experience the comfort of being at home. If not, you risk having a house but a big loan that leaves you with insufficient funds for things like your or your children's future.