The interest paid to the lender for a house loan made for a property that is still under construction is known as pre-EMI. Often people while buying a home get confused and wonder, is pre-EMI interest paid by the builder? With the pre-EMI option, the regular EMI payments (including interest and principal amount) begin as soon as the property is in possession, or within a predetermined time frame (usually 2-3 years). Depending on the loan agreement terms and the lending institution, this time frame may change.
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It is the builder's responsibility to pay the EMIs as long as the project in which the property is reserved is still being built. Pre EMI interest paid by builder is the standard operating procedure and this payment must be made up until the homebuyer receives possession of the property.
Pre EMI paid by builder is a choice the borrower has, under which the bank only recoups the interest portion of the mortgage paid to the builder or developer during the construction phase. The bank begins collecting the regular EMIs, which comprise both the principal and interest after it receives ownership of the home from the builder.
For home loans on properties that are still being built, the lender pays the builder a portion of the loan amount during various phases of construction before disbursing the entire amount after the project is finished. Until the commencement of the regular EMI instalments, the lender only receives the interest that was charged on the amount disbursed for these payments.
These Pre-EMIs are no longer assessed on the whole loan amount, but rather simply on the amount issued in stages. The Pre-EMI amount likewise rises with each disbursement, as well.
I hope this suffices your query, is pre-EMI interest paid by the builder? I hope this helps:)
Read More:
Can I Claim Pre EMI Interest on Housing Loan? How to Calculate Pre EMI Interest for Home Loan? What is Pre EMI Interest: Meaning and Features?Your Feedback Matters! How was this Answer?
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Is Pre-Emi Interest Paid By The Builder?
Sahil
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2022-12-21T08:15:51+00:00 2022-12-21T08:15:51+00:00Comment
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