The sales contract is concluded between the builder and the buyer. The home loan provider is another party to the loan agreement with the buyer.
By Chaitali Dutta
I took out a mortgage to buy an apartment in 2011, but I haven’t taken possession of it yet. I paid EMI regularly. Can I stop paying EMI?
—Arun Kumar Grover
There are two agreements here that bind the parties. The sales contract is concluded between the builder and the buyer. The home loan provider is another party to the loan agreement with the buyer. If the builder has not given possession to the purchasers, they can collectively go to court to appeal to justice. However, if the EMI is interrupted, the loan is in default and the borrower’s CIBIL rating suffers. The bank has mortgage rights to the property offered and in the event that the bank does not obtain the valuation from there, there is a possibility of further litigation with the bank.
What is the maximum duration of the student loan? Can I benefit from a tax advantage throughout the duration of the loan?
Usually, the maximum term of a student loan is seven years. The tax benefit is the interest paid on the loan which is deducted from the taxable income of the person paying the IMEs. If the parent pays the IME, he can claim the tax benefit. Once the student starts earning money and pays the EMI, the tax benefit can be claimed directly by them.
I have a home loan with HDFC Ltd. Now I want an additional loan. As I am expecting money after one year, can I prepay the additional loan?
Yes, of course, once you have additional funds, you can go ahead and pay back to the loan account.
Should I go for a mortgage indexed to the repo rate or go for a loan with an HFC?
My suggestion would be to opt for a loan that is tied to the repo rate.
My daughter is a student and earns money from tuition fees. Can she opt for a car loan?
For the car loan, the borrower must prove his ability to repay on proof of income. This is usually done using tax returns for the last three years for self-employed income.
The author is the founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your questions to [email protected]