I absolutely agree with the observations of Adroit; ADF results in we financing the builder especially if the expected date of possession of flat/home is few months away and not immediate. Most people miss out on the fact that the borrower needs to pay interest only on the amount so far disbursed if one opts for pre-EMI. The word Pre-EMI itself miss leading. The correct word should be interest during moratorium; The most crucial aspect many a home aspirant tends to forget is that "THERE IS NO TAX BENEFIT DURING CONSTRUCTION PERIOD OF THE HOUSE". If one opts for for ADF, there is likely cash flow problems during that period as one needs to make various small changes in the flat/home apart from what the builder is giving to suit individual requirements for which payment has to be made immediately apart from EMI plus tax and one may end up having personal borrowings from credit card companies during that period. Also, many of us would be prepaying our housing loans and Pre-EMI hardly affects us in the end. When I went for a housing loan, I convinced my husband to opt for pre-EMI and now we are happy with our choice.
