Loan on Underconstruction Flat

POSTED BY Pravesh Jain ON February 3, 2013 12:09 pm COMMENTS (7)

Dear Experts,

Please clarify below doubts if someone applies loan on underconstruction flat with SBI:
1. Can SBI Max Gain Home Loan possible on underconstruction flat.
2. How disbursement happens when a due date comes for this case. Does bank pay directly to builder or does bank pay to the customer who in turn pays to builder.
3. If amount request by builder on due date is 2L, can customer ask bank to pay for eg. 1L only and rest payed by customer himself.
4. If point 3 answer is yes, then during the time of possession the total amount disbursed will be less than that applied for. Will loan be downsized automatically or what will happen to remaining sanctioned amount. Also, does this have negative impact on CIBIL score?
5. Does prepayment impacts CIBIL score in negative way.
6. If someone sells an underconstruction flat before possesion for which loan is taken from SBI, is that possible? Also, what will happen to loan in that case as amount disbursed till that time will be less that amount applied for and full emi may not be started.
6. Per my knowledge one can not take interest paid rebate of home loan on underconstruction flat but can it be taken later after possession.
Thanks in advance.

7 replies on this article “Loan on Underconstruction Flat”

  1. prateek says:

    sorry for replying on such an old post. But I had the same query aboutTranche EMI. Is it possible in Maxgain ?

  2. Dear Pravesh, what do you mean by Tranche EMI? Please clarify.

    Thanks

    Ashal

  3. Pravesh Jain says:

    Hi Ashal,

    Many thanks for replies and answers are very clear now. I just have one last question as below:

    Does SBI Home Loan with Max Gain account provides option of Tranche EMI?

  4. Dear Pravesh, here are the answers for your queries.

    Pravesh: Who gets the letter on due date bank or customer? and will bank pay directly or bank will raise cheque on builder name and give it to customer.
    The cheque ‘ll be in the name of builder. It’s normally builder who ‘ll go to bank to receive the cheque as he is in the need of that cheque.

    Pravesh: Do you think instead of having such a confusing structure (from interest or money saved by doing above) parking the same amout which I wanted to pay directly to Max gain account will lead to same impact or different considering Trance EMI?
    Yes, you may park your surplus amount in to MG acct. but do note, in case of need in between for this surplus amount, you can not withdraw if final disbursal is still pending. The interest calculation ‘ll remain same in both cases.

    Pravesh: Unclaimed amount will be returned as mentioned above means a formality on paper to have a positive entry in max gain account for remaining amount thus nullifying it?
    Yes to accept the lower loan amount & to return the excess loan amount, you w’d have to do paper work.

    Pravesh: By loan closure by purchaser, you are referring to original purchaser. Also, again does this impact CIBIL? also, loan closure will happen similiar way as in above point for unclaimed amount?
    Further the claimed amount on which EMI is happening can continue or loan has to be completely closed by paying entire amount?
    Here purchaser means the new buyer to whom you are selling your under construction flat. the early loan closure ‘ll impact your CIBIL score positively. You applied for 30L Rs. loan & till date received only 18L Rs. So 12L Rs. loan amount is still lying in your MG acct. To close the loan, you need to pay that used 18L Rs. amount. You may park from your own money or from the cheque received from the new buyer. When the original borrower (you) is not in picture, how can loan be continue. Yes bank may provide the option to the new buyer to continue the loan as per existing loan amount but the new buyer w’d have to do loan paper work with the bank again.

    Hope I’m able to answer your queries. 🙂

    Thanks

    Ashal

  5. Pravesh Jain says:

    Thanks Ashal. I have further queries on below points:

    2. How disbursement happens when a due date comes for this case. Does bank pay directly to builder or does bank pay to the customer who in turn pays to builder.
    Bank ‘ll release the cheque to builder as on the basis of %age completion of the project.

    Pravesh: Who gets the letter on due date bank or customer? and will bank pay directly or bank will raise cheque on builder name and give it to customer.

    3. If amount request by builder on due date is 2L, can customer ask bank to pay for eg. 1L only and rest payed by customer himself.
    For such set up, you need to inform your builder to raise a demand only for 1L Rs. & balance you need to pay from your own pocket.

    Pravesh: Do you think instead of having such a confusing structure (from interest or money saved by doing above) parking the same amout which I wanted to pay directly to Max gain account will lead to same impact or different considering Trance EMI?

    4. If point 3 answer is yes, then during the time of possession the total amount disbursed will be less than that applied for. Will loan be downsized automatically or what will happen to remaining sanctioned amount. Also, does this have negative impact on CIBIL score?
    The lloan ‘ll not be downsized automatically & you w’d have to inform your bank that you are satisfied with the disbursed amount. The unclaimed amount can be returned to bank & thus reducing the over all loan burden. If you are not informing the bank, the unclaimed amount ‘ll remain as surplus amount in your MG acct.

    Pravesh: Unclaimed amount will be returned as mentioned above means a formality on paper to have a positive entry in max gain account for remaining amount thus nullifying it?

    5. Does prepayment impacts CIBIL score in negative way.
    No, actually it creates a positive impact as the loan ‘ll be over earlier than normal term, so it ‘ll be a positive feedback from your bank to CIBIL.

    6. If someone sells an underconstruction flat before possesion for which loan is taken from SBI, is that possible? Also, what will happen to loan in that case as amount disbursed till that time will be less that amount applied for and full emi may not be started.
    Sell out is possible but bank ‘ll ask first for loan closure from the purchaser of this flat. Alternatively, the purchaser may opt for loan take over either with SBI itself or from any other bank.

    Pravesh: By loan closure by purchaser, you are referring to original purchaser. Also, again does this impact CIBIL? also, loan closure will happen similiar way as in above point for unclaimed amount?

    Further the claimed amount on which EMI is happening can continue or loan has to be completely closed by paying entire amount?

    Thanks again,
    Pravesh

  6. Dear Pravesh, I’m trying to answer your queries.

    1. Can SBI Max Gain Home Loan possible on underconstruction flat.
    Yes

    2. How disbursement happens when a due date comes for this case. Does bank pay directly to builder or does bank pay to the customer who in turn pays to builder.
    Bank ‘ll release the cheque to builder as on the basis of %age completion of the project.

    3. If amount request by builder on due date is 2L, can customer ask bank to pay for eg. 1L only and rest payed by customer himself.
    For such set up, you need to inform your builder to raise a demand only for 1L Rs. & balance you need to pay from your own pocket.

    4. If point 3 answer is yes, then during the time of possession the total amount disbursed will be less than that applied for. Will loan be downsized automatically or what will happen to remaining sanctioned amount. Also, does this have negative impact on CIBIL score?
    The lloan ‘ll not be downsized automatically & you w’d have to inform your bank that you are satisfied with the disbursed amount. The unclaimed amount can be returned to bank & thus reducing the over all loan burden. If you are not informing the bank, the unclaimed amount ‘ll remain as surplus amount in your MG acct.

    5. Does prepayment impacts CIBIL score in negative way.
    No, actually it creates a positive impact as the loan ‘ll be over earlier than normal term, so it ‘ll be a positive feedback from your bank to CIBIL.

    6. If someone sells an underconstruction flat before possesion for which loan is taken from SBI, is that possible? Also, what will happen to loan in that case as amount disbursed till that time will be less that amount applied for and full emi may not be started.
    Sell out is possible but bank ‘ll ask first for loan closure from the purchaser of this flat. Alternatively, the purchaser may opt for loan take over either with SBI itself or from any other bank.

    7. Per my knowledge one can not take interest paid rebate of home loan on underconstruction flat but can it be taken later after possession.
    Yes the unclaimed interest of prev. years can be claimed in 5 equal installments starting from the 1st year in which possession is availed by you.

    Thanks

    Ashal

  7. Pravesh Jain says:

    Question was not visible above, so putting again below:
    Dear Experts,

    Please clarify below doubts if someone applies loan on underconstruction flat with SBI:

    1. Can SBI Max Gain Home Loan possible on underconstruction flat.

    2. How disbursement happens when a due date comes for this case. Does bank pay directly to builder or does bank pay to the customer who in turn pays to builder.

    3. If amount request by builder on due date is 2L, can customer ask bank to pay for eg. 1L only and rest payed by customer himself.

    4. If point 3 answer is yes, then during the time of possession the total amount disbursed will be less than that applied for. Will loan be downsized automatically or what will happen to remaining sanctioned amount. Also, does this have negative impact on CIBIL score?

    5. Does prepayment impacts CIBIL score in negative way.

    6. If someone sells an underconstruction flat before possesion for which loan is taken from SBI, is that possible? Also, what will happen to loan in that case as amount disbursed till that time will be less that amount applied for and full emi may not be started.

    6. Per my knowledge one can not take interest paid rebate of home loan on underconstruction flat but can it be taken later after possession.

    Thanks in advance.

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