Advice about home loan

Mohan is working with a private sector bank. His wife Megha is working with a leading PSU. They are staying in staff quarters provided by Megha’s employer. They own a 1 BHK apartment in Mira road in an old building which is likely to go for redevelopment in the near future. They are planning to buy a 2 BHK apartment in Mira road itself for their post retirement requirement.

Their budget is 60 lacs, of which they have 10 lacs and for balance they will take a home loan. After a lot of house hunting, they finally liked a project from a reputed developer.

It’s at the pre launch stage and available at 25% discount to similar completed projects. A 2 BHK apartment will cost Rs. 50 lacs. However, since it’s at an early stage, banks are yet to approve funding for the same. Also the developer is asking for 50 % down payment and the balance in installments after the project is approved.

Advice & Guide: Generally, it’s not advisable to invest in a project where the approvals are not in place as there is uncertainty regarding the completion time of the project. However, given the fact that Mohan and Megha are not in a hurry to get possession and also they are getting the apartment at very attractive price, they may consider the same if they are convinced about the reputation and track record of the developer. They can take a home loan of Rs. 15 lacs against their exiting 1 BHK flat. Once the new project is approved for funding, they can take a loan for the same and make subsequent installment payments as well as pay off the loan against their existing 1 BHK apartment.

Credits Market Express

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