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