Is it better to take half home loan and pay half cash for buying home?

POSTED BY Raj ON July 31, 2012 2:47 pm COMMENTS (7)

Hi Ashal&Manish and Experts,

I have booked an under construction flat 3 months ago and it is possesion by Jun 2013. The flat cost is 38 lacs. I have paid 20% and home loan sanctioned for 26 lacs under SBI MAXGAIN for 20 years. Also 14.5 lacs are disbursed from loan to the builder.
I need to pay remaining amount 4.4 lacs and registration from my pocket itself.I will get this amount in next 6 months from my savings.
Recently my father has sold his plot and given 10 lacs to me. So now my question is whether I stop taking remainig loan amount and pay this 10lacs amount for my home? or should I take full loan and invest this 10 lacs into some other investment for long run may be 15+ years? or any other suggestion?

Appretiate your suggestions.

Thanks all in advance!!

7 replies on this article “Is it better to take half home loan and pay half cash for buying home?”

  1. GRB says:

    Dear Ashal,

    One more question here 🙂 SBI has disbursed 14.5 lacs till now out of 26L. So if I park 10L amount into OD account now itself, will I get any benefit? I mean, interest will be calculated only for 4.5L for my pre EMI?

    Thanks!

    1. Dear GRB, Yes is the answer. The PRE EMI interest ‘ll be charged only on 4.5L Rs.

      Thanks

      Ashal

  2. TheZionView says:

    GRB on of the main advantage of SBI Max Gain is when you have additional amount.

    Park this 10L in your max gain account .This will bring your principle to 16L and the interest will be calculated based on that.

    Which will make your regular EMI to have maximum amount going towards principle and hence closing of loan earlier than planned. After that you will still have this lumpsum for your future investment or needs

  3. Dear GRB, Please accpet this 10L amount from your father as home loan. Pay him interest or even accrue the interest if not actually paid by you. Deposit this 10L Rs. into your Max Gain account. The interest paid by you to your father ‘ll be eligible for tax benefit. The 10L Rs. parked in Max Gain ‘ll bring down your interest outgo.

    Regarding the investment choice – You can use this amount for investment once the final disbursal is done from Max Gain.

    Please update with your views.

    Thanks

    Ashal

    1. GRB says:

      Thanks for the suggestions Ashal.

  4. My Suggestion would be to use this 10 lacs you got from father, if you want to pay him interest on that , then you can do that else the better thing would be to reduce your tenure and lets the EMI be same as earliar .

    1. GRB says:

      Thanks Manish for quick reply. I have already kept some more amount in SCSS on my father’s name,so , he does not need interest earned from this.

      My EMI is not yet started, I’m paying only interest. How about 15 lacs loan for 10 years tenure?

      Thanks!

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