How to make the right choice when buying a house

Buying a house is a big financial commitment. Don’t let an investment of Rs 50-60 lakh be influenced by freebies worth a few thousands.

When Arun Kumar Pathak booked a flat in Noida four years ago, the builder had promised to hand over possession within 18 months. He had even offered a hefty 9% discount if Pathak paid the entire amount up front. Not convinced, Pathak opted for a smaller 2% early bird discount and paid only 30% of the price at the time of booking.

“The rest 70% is payable only when I get possession,” he says with a sense of relief. That is because the project is still not finished and there is no saying when the project will be handed over.

Pathak was lucky, but thousands of other buyers are not. Delay in projects has become a common thing across the country. The best option of buyers is to opt for a construction linked payment plan under which they pay as work on the project progresses. This way you don’t lock up your money in a project that is not moving ahead.

This week’s story examines the arithmetic behind each payment option and explains which of these suits you best.

1. Construction-linked plan: Cushion buyers against delay in projects

2. 30:70 subvention plan – Requires a small 3 down payment

3. Subvention without loan: Rigorous due diligence required

4. Interest waiver on home loan: Cuts EMI burden

5. Assured rentals: Reduces cost of borrowing

Read the detailed analysis at:
http://economictimes.indiatimes.com/articleshowsp/49428031.cms

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