How Much Cash You Actually Need Before Booking a Flat

Buying A Flat In India? Most home buyers believe one thing:

“If I arrange the down payment, the rest will be handled by the bank.”

This assumption is the reason many buyers feel financially stressed even before the home loan is fully approved.

In reality, the down payment is only one part of the cash you need upfront. Several other expenses hit you before or during booking, and banks do not cover them.

This guide explains the real cash requirement buyers should be prepared for – so you don’t get stuck mid-process.

Buying a Flat in India? Here’s the Real Cash You Need Before Booking

Banks finance a percentage of the property value, not your entire purchase journey.

Everything that falls outside the loan disbursement window must be paid from your own pocket. This timing mismatch is where most buyers struggle.

1️⃣ Booking Amount

Most builders ask for a booking amount to block the flat.

• Typically ranges between ₹50,000 to ₹5 lakh
• Must be paid before loan approval
• Often non-refundable or partially refundable

Banks do not fund booking amounts.
This is pure upfront cash.

2️⃣ Agreement for Sale & Initial Builder Demand

After booking, builders usually issue a demand linked to:

• Agreement for Sale registration
• First construction-linked installment
• Sometimes 10-20% of property value

Even if your loan is approved, disbursement may not happen immediately, especially if documentation is pending.

Buyers often bridge this gap using savings.

3️⃣ Stamp Duty & Registration Charges

Stamp duty and registration are never included in the home loan.

Depending on state and property value, this can be:

• 5%-7% of agreement value
• Plus registration and miscellaneous charges

This amount is due at the time of registration, not later.

4️⃣ GST on Under-Construction Properties

For under-construction flats:

• GST is payable on construction-linked demands
• Banks do not finance GST

Many buyers are caught off-guard when GST is demanded along with early installments.

5️⃣ Loan Processing & Legal Charges

Before disbursement, banks charge:

• Processing fees
• Legal verification fees
• Technical valuation charges
• GST on these charges

Even if some fees are deducted from disbursement, many are payable upfront.

6️⃣ Disbursement Gaps

This is the most underestimated issue.

Banks release money only after:

• Technical clearance
• Legal clearance
• Proper demand letter
• Stage-wise construction verification

If the builder’s demand comes before bank clearance, you may need to:

• Pay temporarily from savings
• Get reimbursed later (sometimes delayed)

This gap creates sudden cash pressure.

7️⃣ Rent + EMI Overlap

For buyers living on rent:

• EMIs may start before possession
• Rent continues until you move in

This dual burden can last months, especially for under-construction properties.

Banks don’t factor this into eligibility – but your monthly cash flow feels it immediately.

A Realistic Example (₹70L Flat)

Typical upfront cash requirement may look like:

• Booking amount: ₹2,00,000
• Down payment (20%): ₹14,00,000
• Stamp duty & registration: ₹4,00,000+
• Bank charges & GST: ₹50,000-₹80,000
• GST during construction (if applicable): variable

👉 Total cash needed before full loan flow can easily cross ₹20–22 lakh.

Most buyers plan only for the down payment – and panic later.

How to Prepare Without Stress

Before booking any flat:

• Keep a cash buffer beyond down payment
• Ask builder for a payment schedule
• Confirm bank disbursement timelines
• Avoid committing all savings upfront

A small delay or documentation issue shouldn’t push you into emergency borrowing.

The Bottom Line

Buying a flat isn’t just about eligibility and EMIs.

It’s about timing.

The buyers who feel comfortable are not the ones with the biggest loans – but the ones who planned for everything the bank doesn’t pay for.