Full EMI – Payment to builder

POSTED BY Hemant ON November 7, 2012 10:51 pm COMMENTS (4)

I am planning to avail a home of around 45L from SBI. For simplicity I assume that the EMI will be 45K / month after full disbuirsement. However it will take another 2 years to get the possesion. I am planning to go for a full EMI right from day 1.

I would like to know

1. If my disbuirsement amount is 4L, in normal circumstances, the Pre EMI would have been 4000 / month. However since I am paying 40K, how is the principle and interest adjusted.

2. Is it that the balance amount of 36K is adjusted against the principle against the disbursement made by the bank?

3. If I have parked some surplus amount in max gain account, in my opinion that amount will be taken into consideration only after the full disbursement is made irrespective of whether I have started a full EMI or PRE EMI. Till then the anmount kept in max gain will be as good as dead investment. Please correct if my understanding is wrong.

 

Thanks,

Hemant

4 replies on this article “Full EMI – Payment to builder”

  1. Dear Hemant, You can top up into MG during partial disbursal. the same ‘ll give the benefit of interest saving. the only thing important is, you can not withdraw your own money in case of need till full disbursal.

    Before starting full EMi from day one, make sure Moratorium period is not there in your home loan.

    Thanks

    Ashal

  2. Biswa Singh says:

    1. EMI or Pre-emi are not calculated the way you think. In both cases you have to pay bothe pricipal and interest. Its calculate in such a way that your interest component is higher in the intial years and very less principal. Please check with the bank to know the exact formula.

    2. In the initial years may be you would be paying 36K as interest and 4K as principal.

    3. There is no point in parking surplus money in Maxgain account before full disbursement as bank consider the parking after full disbursement.

  3. Biswa Singh says:

    I think you forgot to publish your question.

    1. Hemant says:

      Thanks Biswa. I have updated my query. Not sure why it was not getting reflected. Are you able to see the query now?

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