Hi,
I have a question on the Pre-EMI loan payments.
I have applied for a home loan of 45L from SBI ( 15 year tenure @ 50,400 EMI per month) and the house is currently under construction. The builder says the house will be ready by 2014 Dec.
I have paid 25% down payment as part of booking, applied for 70% loan from bank and will also do 5% self-payment upon possesion.
This 70% I understand will be paid by the bank ( SBI) to the builder as per construction. My loan has been sanactioned and the bank has instructed me to repay the Pre-EMI each month as per mony disbursed by bank till final completion of house.
Considering the above, can you suggest me on the below:
Q1) Is Pre-EMI a mandate? I think it helps me to save liquid money ( as its less than full EMI) for the next 2 years. Am i correct?
Q2) This Pre-EMI will only pay the interest amount on the disbursed fund without touching the Principal. Am i correct?
Q3) Does it mean that I have to pay 50,400 for 15 years starting only from 2015. In other words this pre-emi (interest) which i pay for next 2 years is an extra amount i need to pay?
Q4) Is thier any Tax benefit on this pre-emi?
Q5) The bank officials are suggesting me to open a recurring account with the bank ( I allready have Saving and FD acount). SO how does it help me?
Request your help/support and answers on the above questions.
Thanks in advance for your valuable help and suggestion.
Regards,
Arijit