Home Loan: All you need to know about hidden charges
Home loans are a breather for many to fulfill their dream of owning a home. Getting 75% to 80% of the funds of the property cost from the bank makes you go further closer to your dream. You might be thinking that you only need to pay the fixed EMI to make your dream home come true.
It is not only EMI that a home loan cost you, but also some other hidden charges such as Loan processing fee, Administrative fee, Document charges, Late payment charges, Legal fees, Technical inspection fees, etc. Here are some of the hidden charges that bank levy on you for the home loan.
Loan processing fee
The loan processing fee is also called a loan origination fee. This charge is levied by the bank for processing your loan application. It is a one-time charge based on the percentage of the loan amount you applied for.
The administrative fee is charged for record keeping and other administrative costs. This also includes the annual charge for updating your home loan records.
While processing the home loan, important documents are usually kept at a central location. Banks prefer most efficient courier services to ensure the document’s safety. So the bank will charge you the document charges while retrieval of documents during the closure or pre-closure of your home loan.
Memorandum of Deposit of Title Deed (MODT) is executed for a mortgage by depositing the title documents of the property with the bank at your own free will.
Government levies a stamp duty for the registration charges. Stamp duty charges can vary from state to state. This is charged on some percentage of the home loan.
Late payment charges
As the name denotes, Late payment charge is levied when you delay payment of EMI, the bank will charge you for the penalty. You would need to pay interest along with the EMI for the late payment.
Legal fees are charged when banks opt external lawyer to validate the legal aspects of your home loan.
Technical inspection fees
This is charged for the inspection of your mortgage. Banks inspect the property to ensure that it is not over lending.