Real Estate Home Builders and the Concept of EMI Sharing

Equated Monthly Installment (EMI) sharing is a unique idea that has been introduced by real estate home builders. The scheme targets those customers who find it difficult to make EMI payments, during the construction period. You may already be aware that an EMI sharing allows a home loan borrower to refrain from paying installments till he/she secures possession of the apartment. Instead, the builder will pay the EMI, on his behalf, for a fixed period of time.  However, the builder will pay the interest alone and not the principal amount.  Remember, it is important to choose a reliable real estate home builder who has a proven track record and a good reputation in the industry.

The reason why this new scheme is gaining momentum with consumers is that it ensures that you are not financially burdened when you book an apartment for purchase. Further, you will be able to manage your cash flows in a streamlined way. The amount of EMI paid by the real estate home builder is a discount offered by him in the flat’s cost. Many highly reputed builders are offering the service, namely, Emaar MGF Land, SG Estates and Ramprastha, just to mention a few.

Real Estate Home Builders: How Does EMI Sharing Work?

Real estate home builders require you to first get the home loan sanctioned from the bank. Then the real estate home builder will give you a post-dated cheque for a fixed period of time. Thereafter, you have to deposit the cheque in your account.

The EMIs are paid to the bank directly by the real estate home builder. Further, the builder can either pay the full EMI amount for the fixed period or opt for partial EMI sharing. Here are two important types of EMI sharing options:

Full EMI Sharing Option

In this, the builder pays the entire amount of EMI, for the fixed period, on your behalf. However, this amount includes only the interest amount.

Partial EMI Sharing Option

In this option, an agreement is signed between the borrower and the builder. For instance, the builder will pay only 50% of the interest amount and rest is paid by the borrower.