Home loan margin money - bank would make us pay our part prior to their contribution?

Excellent eg.
I was always under the impression that the bank would make us pay our part prior to their contribution…in the above eg. I would think that bank would disburse their amount only after I make the initial 20lacs contribution…

Thanks Binny for writing in. I appreciate your comment and time.

Hi Soan … I’m purchasing a property where I have already paid a bit more than 20 percent as down payment (construction linked plan). So to be on the safer side, when I draw the agreement with my bank, i need to ensure that the margin has to be 80-20 ? so that i never run into problems ?

Don’t worry. Bank will keep your contribution in mind while calculating the margin money percentage. Just make sure that you plan for the subsequent payment as per the construction phase to avoid any surprises. Generally, bank will pay the complete amount of a builder demand till the time ratio is intact.