Top 4 Payment Plans For The Under-Construction Properties

Buying the dream home is the biggest decision of anyone’s life. It takes lots of time, energy and money during the buying process. Choosing a property which is still under construction is beneficial for the buyer as it cost less than ready-to-move-in property. Check out the article to learn about payment plans for under-construction properties while selecting the right project for you.

Types of Payment Plans For the Under-construction Properties 

The cost of purchasing a property is substantial, and if you take out a loan, your EMIs will consume a sizable portion of your monthly income. 

Therefore, the payback should be a carefully thought-out, organised strategy. 

Builders today have various options and plans that would encourage purchasers to accept loans and book houses even before building begins, let alone taking possession because payment may be a concern for many purchasers and may discourage them from buying homes.

Here are different types of payment plans for the under-construction properties,

Downpayment Plans For the Under-construction Properties 

The downpayment plan is one of the traditional payment options while purchasing a property. 

In this payment plan you are required to pay 10-15% of the property value at the time of booking the unit, 80-90% within a set timeframe i.e approximately 45 days and the remaining amount at the time of taking ownership of the property.

The remaining amount is the cost levied on the property by various authorities such as Stamp Duty Registration charges which are 5% of the cost of the property and other charges including maintenance, facilities like a gym, swimming pool etc. 

Also, check out What is a Home Loan Protection Plan and What are its benefits?

Construction-linked Payment Plans for the Under-Construction Properties

The construction-linked payment plan for under-construction properties is also named a possession-linked payment plan.

In this payment option, the buyer needs to pay 10-12% of the property value upfront at the time of booking and the rest amount with the stages of construction completion. 

As compared to the downpayment option for property purchase the buyer gets more discount in this payment plan.

CLP payment option carries less risk as the payment is linked with the construction of the project the developer delivers the project in a said timeframe to keep the funds flowing. 

Also, check out What Are Construction-Linked Payment Plans? What Can Be The Best Plan For You?

Flexi Payment Plans For the Under-construction Properties 

While purchasing the under-construction property builder offers various plans which can be suitable for each kind of buyer. 

The Flexi payment plan is a combination of the above-mentioned payment options.

In this payment plan, one-third amount of the property buyer needs to pay while booking the unit, next with the project time frame and the rest at the time of taking possession of the property.

Since approximately half of the value of the property price is made upfront, the buyer often receives a 5% discount on the property’s base price.

Also, check out Home Loan Processing Fee 2022 And Other Charges For A Home Loan

Time-Linked Plans For the Under-construction Properties 

The time-linked property payment plan is one of the known property payment plans in real estate.

These plans call for you to pay for your property according to a predetermined schedule established by the builder. 

This applies regardless of how far along the construction is completed, you are required to pay in a decided timeframe structure. 

For choosing this option, some developers will give you an 8–10% reduction on the cost of the base property price.

Also, check out What Is A Builder Subvention Scheme In Real Estate?

Risk Involved in Payment Plans For The  Under-Construction Properties

The payment plans for the under-construction properties seem a great alternative while property purchase but they also come with certain risks such as

• Construction and property delivery delays.
• The actual delivered property may not match the previously shown sample’s apartment.
• The downside of payment plans like the downpayment option is the project could become stalled or perhaps abandoned due to various legal difficulties. In these circumstances, getting money back from the builder can be difficult.
• When comparing the Flexi Payment Plan to the CLP, interest is imposed on roughly 50% of the total amount from the first year onward, but only on 35% of the amount in the Flexi Payment Plan. Flexi plans hence cost more than CLPs.

For tackling such circumstances, the builders have provided choices for EMI sharing. 

Although EMI sharing is marketed as having “no EMI until possession,” loan borrowers experience a different process. 

The interest amount of each of your EMIs is paid by the builder under the “full sharing of EMI” option. 

However, under the “partial EMI sharing” option, the developer will only pay a part of the EMI interest component.

The option to split your EMI is available for a limited time; after that, you will be responsible for paying the entire EMI. For borrowers with floating rate mortgages, some builders include an additional provision requiring payment at a fixed interest rate.

 Also, check out  Home Loan Processing Fee 2022 And Other Charges For A Home Loan

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