Quote:
Originally Posted by hagarwal
I'm confused about one thing.
EMI = Pre-EMI (i.e Interest part) + Principal Amount.
So if i'm paying pre-emi and simultaneously paying a small principal prepayment, won't the two things be equal?
And if i'm paying my principal, obviously my emi or my tenure will decrease.
Why should i worry about pre-emi then?
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Pre-EMI is the interest on the partial disbursals till the final disbursement is made. Once the final disbursement is made by the HFC to the builder, your EMI starts.
So, for first two years (construction period), you would be paying only interest and not repaying any principal; thereafter, you would be paying your EMI for the tenure.
So you are paying interest for two years plus EMI for 240 months.
Moreover if you are staying on rent before getting the possession of your new property, you will have double burden of Rent + pre-EMI (Not actual EMI)