Other Costs That Usually Accompany Your Home Loan

Home loans usually attract following extra costs:

1) Processing Fees: It’s a fee payable to the lender on applying for a loan. It is either a fixed amount or may be a percentage of the loan amount applied for.

2) Pre-payment Penalties: When a loan is paid back before the end of the agreed duration, a pre-payment charge is demanded by some banks/companies, which is usually between 1% and 2% of the amount being pre-paid. However, Now prepayment charge on prepayment from own source is exempted by the circular of NHB. Now prepayment charge is applicable only on takeover cases.

3) Commitment Fees: Some institutions levy certain percentage as commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned. This charge is lavied on the undisbursed amount of Loan.

4) Miscellaneous Costs: It is quite possible that some lenders may levy documentation or consultant charges.

5) Registration of mortgage deed