In the age of rising property prices, buyers are increasingly turning to post-handover payment plans, which is labeled as a good shortcut. Developers offer attractive terms, making it an excellent avenue for those who can’t afford to pay up-front for the property they want. However, post-handover payment plans come with a certain degree of risk that must be considered before entering such an agreement.
At Emortgage, we understand that post-handover payment plans are a popular option for those looking to purchase a home, but as a buyer, one must be aware of the inherent associated risks. Our property advisors can provide the necessary information to ensure your post-handover payment plan is a safe and secure investment.
What are post-handover payment plans?
Post-handover payment plans mean that buyers have to plan ahead and be thoughtful about their spending. It is also important to note that they are unsuitable for every buyer due to their risks weighing more than traditional payment methods.
Therefore, buyers should always be diligent before entering such an agreement and ensure they understand the terms and conditions involved. Post-payment plans are a valuable financial tool that can help people purchase a property, mobile phone, or even groceries when the money simply isn’t available in lump sum.
In a post-payment plan, the individual makes a series of payments over time until the property’s worth is fully paid for. This payment scheme can be shared between two parties, such as in the case of an employer and employee or between banks and buyers.
What makes Post-Handover Payment Plans a Risky Affair?
Post-handover payment plans can be problematic for buyers. The main risk is that buyers don’t know if the project will be completed on time or if the quality of the end product matches the promise made by the developer prior to signing the contract.
In addition, it can be difficult to cover any losses that may occur due to delays in completion or defects in construction. Buyers that avail of such plans typically make payments upon receipt of keys and possession of the house.
Such payment structures must be analysed sternly before arriving at a decision. Financial advisors often recommend traditional financing options such as full pre-payment at closing, or staggered payments by milestones over a shorter period of time. This ensures that your investment stays secure. That being said, post-handover payment plans aren’t all bad. Here’s a list of its merits and demerits to help you out.
Reasons to Choose Post-Handover Payment Plans
- It includes a lower initial payment and the ability to spread out payments over a longer period of time.
- It is beneficial for those who cannot afford to pay in full right away.
- Great for end-users and international buyers to spread payments out over time and manage their cash flow.
- Pivotal in increasing investor’s portfolios with limited capital spending.
Reasons to Run the Other Way
- The buyer may not be able to get their money back in the event of delays or defects.
- If the borrower defaults on any payments, they could face legal consequences.
- The interest rates associated with such plans tend to be higher than traditional financing options.
Conclusion
In a nutshell, post-handover payment plans can be a great option for buyers who are looking for more flexible financing arrangements. However, it is important to carefully consider the risks before entering into such an agreement and ensure that you understand all the terms and conditions involved.
Emortgage not only provides the best consultancy but also finds the best deals for you in investing a real estate. Moreover, we also provide the best post-handover payment plans with competitive interest rates and other flexible options. Thus, you can have a better real estate experience with us.