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what is the best payment plan to buy a property?

Discussion in 'Home finance' started by ramdev, Oct 23, 2011.

  1. ramdev Member

    Hi , i want to know which one is the best payment method to opt for purchasing a real estate property. I am talking about;

    • Construction Linked plan
    • flexi payment plan
    • down payment plan
    In down payment, i can avail huge discount, in Flexi plan, it is still cheap than construction linked but in construction linked there is peace of mind that i am not putting more money than construction and in down payment method, i may end up locking up money.
  2. sachin New Member

    I think Construction linked plans are better and secure than other options.
  3. raj_ddlj New Member

    Construction Linked Plans
  4. ramchandran New Member

    Go for down payment if property is more than 50 per cent complete. You can avail lot of discounts with down payment plans. Your overall cost of the property may go down significantly.
  5. russel wayne New Member

    I just wanna back your question what do you think is the best and you can afford it seem down payment is a pretty good choice for you because you can get discount,well when i was bought my first plot or tontit in Finland i realize that i made a wrong choice because it is quite expensive but then choosing a quite expensive sometimes is better option rather than cheap one.But here down payment is a good option no doubt.
  6. Ritu Mehta Member

    Buying a property? Know which payment scheme suits you best

    Buying a house is a huge financial step. Most of us exhaust all our savings and yet would have to take some loan to be able to pay the total cost of the property. To make the situation a little less difficult, builders offer different payment plans and schemes. Choose the one which suits your financial situation the best:

    Down-payment plan: It is the most conventional scheme where you have to pay 10-15% upfront, called down payment, at the time of booking and thereafter 80-85% of the total cost within 30-90 days of booking. The remaining 5-10% balance amount, along with any additional charges, is paid at the time of possession.

    In case you are taking a home loan, the equated monthly instalments, or EMIs, start immediately as soon as the bank makes the upfront payment. So, interest is charged on the entire amount from day one. Also, you'll not get any tax benefit on the principal value till the possession. However, if you can manage the cash flow, you can get hefty discounts, sometimes as high as 15-20%, depending on your bargaining skills. The caveat here is any delay in completion and delivery, which is common in this sector.

    Go for this scheme if the project is nearing completion and the chance of the builder missing the deadline is low. Also, if you have the money and trust the builder, you will get the best bargain under this scheme.

    Construction-linked plans: As the name suggests, the payments under this plan are linked to the construction stages. You have to pay around 25-30% of the purchase price within 90 days from booking and the balance in installments on completing different construction milestones. It is usually 10% of the total cost on completion of every floor. Thought you are unlikely to get any discounts under this plan. Risks related to project delays are much less than a down payment plan. Also, you get full tax benefit under 80C from the beginning.

    Go for this scheme if the project is in its initial stages or you do not have ready cash in hand.

    Time-linked plan: Under this plan your installments are time-bound. You have to make payments based on a pre-determined calendar set by the builder, irrespective of the progress that the project has made towards completion. So, even if there is a delay, you are contractually bound to make the payment as per the timetable. Any delay in installment means you will have to pay penalties-- interest on installments payable. It is therefore not a very popular plan.

    However, since the risks are higher, some developers offer discount on time-linked plans as well. Also, like in a construction linked plan, you get full tax benefit from the beginning.
    Go for this scheme if the construction is in its mid stages and you have some cash in hand only partially funding the buy.

    Flexi-payment plans: This plan is a combination of down-payment and construction-linked plans. Here, you are required to pay 10% on booking, another 30-40% of the property value within 30 days of booking. The rest 50-40% payment is done in tranches just like in a construction-linked plan. The last 10% along with one-time charges is paid at the time of possession. Since these installments are linked to the stages of construction, it is a safe option in case of any delay.

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