Before buying a house, it is important to know these 5 big risks, otherwise you will be trapped in EMI..

Everyone dreams of buying their own house, but nowadays there are many such offers in the market, which can be tempting at first sight. So one of these is the No EMI Till Possession Scheme. Actually, the No EMI Till Possession Scheme is quite trending these days. Actually, in this scheme, you do not have to pay EMI in the beginning, and after hearing this, many people consider it beneficial. This is the reason that after seeing this offer, the home buyers make some mistakes. So now we know what the 5 big risks of buying a house are.

What is the No EMI Till Possession Scheme?

Through this scheme, home buyers do not have to pay EMI until they get possession of the house. During this time, the builder pays only the interest amount to the bank, and the principal remains the same. Actually, this is called a subsidy scheme. That is, the builder takes the responsibility for the interest for you for some time. This sounds very tempting, but when the project gets delayed or the builder's condition worsens, the buyer has to bear the greatest loss.

So, will you understand why this scheme is dangerous?

1. Double whammy due to project delay

In our country, it becomes difficult to complete real estate projects on time. So in such a situation, if the builder delays the completion of the project, then the buyer may have to face a double whammy. On one hand, they have to pay the rent of the current house, and on the other hand, they have to pay the EMI of the new house. This situation can affect both the financial burden and the credit score.

2. The responsibility of the loan is completely on the buyer
Usually, the loan is always in the name of the buyer. But if the builder stops paying the interest in between, then the bank directly recovers from the buyer, meaning it is clear that even if the house is not delivered on time, you will have to pay the EMI.

3. EMI can start even before possession

In many cases, it also happens that the bank starts deducting EMI even before getting possession. That is, you are paying the installment on that house, which you have not even started using yet. It is clear that if the project is delayed, this expense increases further, and the total loan cost can double.

4. False feeling of economy

Due to the delay in starting EMI, many people also think that they can easily buy expensive properties. But as soon as possession is obtained, they have to pay the entire EMI. So if the planning is not done according to the plan, then it becomes a big burden.

5. RBI's strictness

Earlier, many banks and housing finance companies used to promote such schemes, but in view of the increasing risk, the Reserve Bank of India (RBI) discouraged such subsidy models. Today, most lenders do not support such schemes and follow the normal repayment schedule.

So what will be the safe option then?
Let us tell you that, as far as possible, buyers should choose a construction-linked payment plan. In this, you have to make a payment according to the completion of the project. Due to this, if the project gets delayed, the financial loss remains limited, or say less. Apart from this, buying a ready-to-move-in property can also be considered good. In this option, there is no uncertainty of possession, and buyers can use the house immediately.

What to pay attention to while buying a house

You should always choose a RERA-registered project.

Look at the track record of the developer's previous projects and delivery.

Before taking a loan, consult a financial advisor and choose a house according to your capacity.

Although the No EMI Till Possession Scheme may seem easy and beneficial at first glance, there are many risks hidden behind it. It can put the buyer in a double whammy and financial insecurity. (Note: The news is based on general information)

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.