To help readers keep pace with what’s happening in the real estate sector, Mint’s Q&A will appear every other Monday.
I am an existing Housing Development Finance Corp. home loan customer. Currently, I am paying an equated monthly instalment (EMI) of Rs12,000 and have 92 months’ payment left. I have taken the loan on a floating rate of interest, which is subject to change. I want to reduce my EMI now to around Rs8,000 for next 10 months, after which I want to increase it for six months. After the increase, I may go up to Rs15,000 per month of EMI. I want to pay in this fashion for the next two or three years due to some family commitments, apart from the tax benefit. Can I increase or decrease EMI as per my requirement? Also, is there any limit to the amount of prepayment for a year?
You may opt for structured repayment options, which will allow you to customize the EMI based on your financial commitments. There are several combinations available that can assist you in modifying EMIs as per the alteration in your cash flow.
Renu Sud Karnad
I would suggest that you meet our counsellors with your present income details to work out the best repayment possibility.
Also, you have the flexibility to decide the amount that you wish to prepay.
I plan to buy a bigger flat and want to sell the property that I presently own to finance part of the amount while, for the balance, I plan to take a loan. I already have a buyer for my current house, but I would need to purchase a new flat before selling this one.
Please advise me on how I can first get the loan to buy the new property as home loan companies finance only 85% of the cost of the property and insist on the customer making his contribution first.
To get finance during the interim period—the time between the purchase of your new house and the sale of the present one—one simple option is going in for a short-term bridging loan, which will provide you immediate finance for the new house. The tenure for such a loan is usually two years, which gives you sufficient time to sell your existing property. During this tenure, you will pay simple interest calculated at the applicable rate of interest, while the principal can be repaid at the end of the term or when you sell your existing property, whichever is earlier.
There are also other options available, such as structured loans and step-up repayment loans that could be looked at, depending on each individual.
Renu Sud Karnad is executive director with HDFC.
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