Buying a plot in udaipur is one of the most significant financial decisions you’ll ever make. To turn this dream into a reality, you have several financing options at your disposal. Two of the most common approaches are traditional mortgages and zero interest EMIs (Equated Monthly Installments). Both have their advantages, but they cater to different financial situations and objectives. In this blog, we’ll compare the benefits of zero interest EMIs and traditional mortgages to help you make an informed decision about which option is better for you.
Traditional Mortgages: A Time-Tested Approach
Traditional mortgages are the most common method of financing a home purchase. Here’s how they work:
- Interest Charges: Traditional mortgages involve borrowing a sum of money from a financial institution, and in return, you pay back the principal amount along with interest charges. Interest rates can fluctuate and add a substantial cost to the total amount repaid.
- Longer Loan Tenures: Mortgage loans often come with longer loan tenures, typically ranging from 15 to 30 years. While this can lead to lower monthly payments, it also means you’ll pay more interest over time.
- Down Payment: Traditional mortgages require a down payment, typically a percentage of the property’s purchase price. This down payment can vary but is usually around 20% of the property’s value.
- Credit Checks: Mortgage lenders conduct thorough credit checks to assess your creditworthiness, and approval is based on your credit score and financial history.
- Fixed or Variable Interest Rates: Mortgages can have either fixed or variable interest rates. Fixed rates remain constant over the loan term, while variable rates can change over time.