Various Home Loan Fees & Charges in India That You Need to Know About!
Home loans come across as a breather if you are looking to meet your dream of becoming a homeowner early in life. Availing funds of up to 75-90 percent of the property’s cost from the lender brings you closer to your dream. However, you may think that you just require bearing a fixed loan EMI to turn your dream into reality. Note that you not only have to bear the EMI, but also a few other important hidden costs like administrative charges, processing charges, document charges, legal fees, technical inspection charges etc.
Thus, having knowledge about your home loan interest rate is not enough, you must also be aware about the hidden charges before you apply for a home loan. At times, lenders who offer lower housing loan interest rates often compensate for this by levying higher charges. Assessing the hidden charge allows you to lower your overall home loan cost.
Check out some important home loan charges you must be aware of:
- Loan processing charge
Processing charge, also called loan origination fee, is charged by lenders for processing your home loan application. This is a one-time fee based upon the percentage of loan availed by you. Few lenders may also levy a fixed amount as processing charge. This is a non-refundable charge levied by lenders, which means the charge is not refunded in case your home loan application is rejected. On festive occasions or upon request, few lenders may agree to waive off this fee.
- Administrative charge
This fee is levied for record keeping and various other administrative costs. Also, this involves an annual fee for updating your loan records.
- Document charges
When processing your home loan, crucial documents are generally kept at the central location. Lenders prefer appointing an efficient courier service for ensuring the safety of your document. Crucial documents required for a home loan include postdated cheques, property documents etc. If you place an application to retrieve your documents during pre-closure or closure of your loan, then the lender may levy document charges.
- MODT (Memorandum of Deposit of Title Deed) charges
MODT is an undertaking, which states you have deposited your property’s title documents with the lender. This is applicable on all kinds of home loans. As per the state government laws, registration fees and stamp duty fees are charged on the document, which is registered. Both the charges differ across states.
- Late payment fees
As the name suggests, late payment fee is charged when you delay your EMI payment. This penalty can either be a fixed amount or percentage of your installment due.
- Legal charges
Legal charges are incurred when lenders add in external lawyers to authenticate your home loan’s legal aspects.
- Technical inspection charges
Lenders assess your property to determine your home loan eligibility chances. They evaluate it closely to understand your property’s location and value. Besides this, lenders also get your property documents reviewed by technical and legal experts. These experts charge a fee for the inspection, which is included in your overall home loan cost.
Ending note
All the above home loan charges are mentioned in your home loan’s terms and conditions. You must ensure to read them and approach the lender if you have any doubts. Once you are aware of all the fees & charges and the offered interest rate, make sure to use the home loan EMI calculator to compare amongst the lenders and set the EMI as per your repayment capacity.