Interest is calculated on annual rates. The effective rate of interest varies depending on the term of the loan. For a loan with a term of 15 years, the effective interest rate would be higher by a very small percentage (in terms of a fraction) per annum than the indicated rate of interest.
A loan taken on a floating interest rate, is a loan where the interest rate which is payable is linked to the market rate. E.g. the bank lending rate. The interest rate payable by you will also rise and fall as per bank lending rates which may also fluctuate.
Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement upto the date of commencement of EMI.
An EMI is the monthly amount to be repaid to the bank or financial institution against a loan amount borrowed for a fixed period of time. An EMI has two components, the principal component and the interest component. There are two methods - reducing balance method and the monthly reducing balance. The Reducing Balance method reduces the principal amount already paid from the outstanding loan amount. Every time you make a payment, you pay interest on that part of the original principal sum that has remained unpaid till then. The loan carrying the lower EMI for the same tenure is the cheaper option.
Banks / financial institutions sanction loan amounts based on certain criteria depending upon your repayment capacity (which takes into account your age, qualifications, assets, liabilities, stability of occupation, savings history) and according to your income.
You can include income of other members in your family too, in case you want to increase the amount of your loan. The maximum loan that can be sanctioned varies with housing finance companies. Generally, the maximum loan amount is 80 to 85% of the cost of your home.
You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, as required by banks / financial institutions with whom you may wish to mortgage the property, during the tendency of loan. In such cases, the beneficiary of the policy will be the concerned institution offering the loan. Even otherwise, it is advisable to insure your property for hazards and fire.
The agreement for sale between the builder and purchaser has to be registered as required by the law of the land. One must register within four months from the date of execution of the Agreement at the office of the Sub-Registrar appointed by the State Government, under the relevant Registration act.
The Stamp paper is generally purchased in the name of the executor to the agreement. Generally, the buyer pays the Stamp duty unless agreed otherwise
Carpet Area: This is the area of the apartment / building which does not include the area covered by the walls.
Built up Area: The carpet area plus the area of the walls.
Super Built up Area: This includes the built up area along with the area under common spaces such as the lobby, lifts, stairs, etc.