EPF was started for the only purpose of pushing workers to set aside a certain portion of their income for their pension. It was generally recognized that if the efforts were to be used for other reasons, this would have a damaging effect on the size of the retirement nest egg. Employee Provident Fund is that saving that we don’t feel coming as we never get it in hand but it definitely helps in the long run. It is the money that comes as a surprise in times of emergency and therefore it can be utilized for buying a home too. Just know the proven tips that can be beneficial in buying a home. People generally opt for home loans in buying a home but this EPF can be great help in paying the easy monthly instalment or the down-payment that can be hefty.
However, using these efforts to fund excellent property loans is also another form of long lasting saving as the rentals are likely to appreciate after the mortgage is resolved. This article talks about how you can utilize your EPF money for your house loan installment and the following effect such a move may have on your pension fund.
How does it work?
This type of drawback includes you withdrawing money from your Account 2 to fund your monthly payments for your property loan, which was taken up either to buy a new house or build a new one.
Contributors need to go to the EPF to apply for the monthly withdrawal only once, and following payments would be directly acknowledged to their personal accounts every month.
The board has all recommended a plan to accomplish members to buy houses where they will get funding from their PF build up and will be allowed to commitment their upcoming PF participation as EMI (Equated Monthly Instalment) transaction.
Under the recommended plan, there will be tripartite agreement with a member, bank/housing agency and EPFO for promising upcoming PF efforts as EMI transaction.
The board recommended that under the plan, the members will buy a residing unit with loans from banks or property organizations and hypothecation of property in favour of the latter.
Advances for payback of property loan
The provident fund plan allows you to acquire the drawback service, for payback of the excellent stability in your dream house loan taken by you or your husband or wife for the above reasons. The development quantity cannot surpass 36 months of basic salary and DA.
This drawback can only be made for loans, acquired either by the members or by the partner, from specified organisations like government authorities and local government, authorized co-operative community, state property board, nationalized banks, public banking organizations, Municipal Corporation, or any development authority, for buying of your dream house.
For addition/improvement in your house that belong to self and/or the spouse
You are also eligible to take out money from your provident fund account, for making improvements or developments to a residential house that is that belong to you or your wife or together. This drawback can only be acquired, after five years from finalization in your house. It is not necessary that the house for which you want to carry out the developments should be the same, on which you had acquired the drawback service. This drawback for enhancement can be acquired, even if you have not acquired of the drawback service for buy or development in your house. The quantity that you are eligible to take out, for enhancement or inclusion, is limited to 12 months’ basic salary and DA, subject to lower of the stability relatable to the employee’s share of interest in your hard-earned money or the cost of such enhancement.
Today most people that belong to the working class in India consider buying your dream house as one of their top main concerns. In a developing economic system like ours, with incomes rising and banking organizations wooing property buyers with attractive loan offers, it is no surprise that the demand for property is on the rise. However, it would be silly to buy your dream house simply because you can acquire a loan for purchasing it. A lot of planning should be done before you actually take the plunge