What Are The 17 Hidden Charges In Home Loan?

What Are The 17 Hidden Charges In Home Loan, Home loan is a requirement of every buyer who desires to buy a home but the bank will never let you know about the hidden charges. They try to keep things unfolded and later on add these charges. While applying for a home loan is the processing fee but there are many hidden charges in home loan that you would come to know only later.

In this blog, we have covered 17 home loan hidden charges that you may come across at various stages.

Read Also: Godrej Buy 33 Acre of Land in Bannerghatta Road Bangalore

Hidden Charges in Home Loan

1. Processing Fee

The first cost is processing fee that covers the marketing and sales costs and administrative expenses for internal processing of the loan at bank. Usually, processing fee is charged @ 0.5%-1% of the loan amount plus service tax and surcharge.

Read also: Top 10 Best Luxury Apartments in Gurgaon

Read Also: Buy Residential and Commercial Property in Noida

Read Also: Loan Against Property In Noida

2. Administrative Charges

Administrative Charges are meant for the internal approval process expenses as once the bank gets a loan application, it has to internally process the loan for approval. Generally, administrative charges are considered to be a part of the processing fee, which is recovered from the customer. But in some cases the bank can charge administrative expenses separately also. A bank may compromise on processing fee but will recover its administrative expenses.

Read Also: DLF One Midtown

Read Also: Top 10 Best Luxury Apartments in Noida

3. Pre Payment Charges

The RBI guidelines, pre payment penalty is waived off for home loans with floating rate of interest. However, most banks will charge 2-4% pre payment penalty on home loans with fixed rate of interest.

Read Also: ATS Homekraft Rohini Delhi

Read Also: Max Sector 128 Noida

Read Also: Godrej Woodsville

Read Also: Paras Floret 

4. Late Payment Charges

If there is delay in making the payment for t he EMI, then the bank charges late payment charges @ 2% per month on the delayed time period with a minimum of Rs. 500 penalty.

Read Also: TVS Emerald Singasandra Bangalore

Read Also: Godrej Pimpri Chinchwad Pune

5. Conversion Charges

To appeal the customers, the banks offer their best interest rates to new customers. If you had taken a home loan when interest rates were relatively high, you would be paying a higher interest rate when interest rates are low.

Read Also:- Top 10 Best Residential Projects in Gurgaon

Read Also:- Top 10 Best Residential Projects in Mumbai

But sometimes, the customer would like to convert the old floating interest rate to new floating rate or old fixed rate to new fixed rate, a conversion charges @ 0.5-1% of outstanding loan amount. Similarly, you have to pay conversion charges of 0.5-1%, if you want to convert floating interest rate to fixed rate or vice versa.

6. MODT Charges

Memorandum of Deposit of Title Deed (MODT) is an affidavit signed by the borrower that he has deposited the title deed of the property with the bank at his own will, in order to raise home loan from the bank. Stamp duty has to be paid to register this document and it varies from 0.1% to 0.2% of loan amount, depending on the state in which the affidavit is registered.

7. Document Retrieval Charges

Banks maintain all the records and important property documents like Sale Deed and Sale Agreements at their central repository. Because at the time of closure/ pre-closure, your bank will get these documents couriered from their central repository back to the branch. For that the bank will recover these charges by way of document retrieval charges @ Rs. 250-500.

Read Also: M3M Sector 79 Gurgaon

Read Also: Smart World Sector 79 Gurgaon

Read Also: Birla Sector 150 Noida

Read Also: M3M Sector 128 Noida

8. Legal Fee

The legal fee is given by banks to hire lawyers for title verification of properties for sale against which they lend money. Some banks charge this legal fee separately from the customer. If a project has already received the approval then you will not have to pay any such fee.

9. Valuation & Inspection Fee

Before sanctioning the loan, the bank conducts an independent valuation of property and physically inspects the property. The costs incurred in valuation and inspection are recovered from the customers. Again for pre-approved projects, you will not have to pay this fee.

10. Documentation Charges

There are documentation costs of Home Loan Agreement, MODT, and Indexing etc and usually it is a part of processing fee. Sometimes the documentation charges are recovered separately by banks to cover documentation costs.

11. Cheque Bounce Charges

Cheque bounce is not good and decreases the CIBIL Score, if any of your repayment or security cheque bounces, you will be charged a penalty of Rs. 200-300 per cheque bounced.

12. Changing Loan Tenure

Changing the time period of a home loan will either decrease or increase your EMI and you may be charged a fee for that.

13. Repayment Mode Swap Charges

There is a swap charges if you change the mode of payment. One will have to pay swap charges of Rs. 250-500.

14. Statement of Account

The statement of account is required as loan account statement can be used for tax or other purposes. Some banks charge Rs. 100-250 per statement if you want a signed statement of loan account. However, account statements can be accessed for free from the online account.

15. Charges for Amortization Schedule

Once, the loan is approved your bank will provide you with a paying back schedule. You will be required to pay a fee of Rs. 100-300 if you want an amortization schedule anytime during loan servicing period.

Read Also: Smart World Sector 111 Gurgaon

Read Also: L and T Sector 150 Noida

Read Also: M3M Sector 111 Gurgaon

16. Copy of Original Documents

The buyer has to submit original property papers; so the bank may charge to provide copies of your documents any time later. Ideally, you should keep scanned copy and a couple of printed copies of your documents before submitting your documents to the bank.

17. List of Documents

You may require the list of documents submitted with the bank while selling the property, transferring the home loan to another bank or for any other purpose. The bank may charge a nominal fee for providing such list.

Home loan hidden charges mentioned in this blog are suggestive and these charges may vary from bank to bank on regular intervals. We hope that you would find this information useful and will be better prepared while taking a home loan next time.

Read Also:- How A Co-Owner Can Be Added To A Property?

Read Also: - Top 10 Best Residential Projects in Pune

Read Also:- Top 10 Best Residential Projects in Kharadi

Read Also: - Top 10 Best Residential Projects In Undri 

Read Also: - Top 10 Best Residential Projects in Wagholi

Read Also: - Top 10 Best Residential Projects In Bangalore

Read Also: - Top 15 Best Residential Projects In Gurgaon

Read Also: Top 10 Best Residential Projects In Noida Extension

Read Also: - Top 10 Best Residential Projects In Sector-150 Noida

Read Also:- Top 10 Best Residential Projects in Noida

Read Also:- Top 10 Best Residential Projects in Wakad

Read Also:- Top 10 Best Residential Projects in Bavdhan

Read Also:- Top 10 Best Residential Projects in Nibm

Read Also:- Top 10 Best Residential Projects in Talegaon

Read Also:- Top 10 Best Low Rise Apartments in Gurgaon

Read Also:- Top 10 Best Residential Projects in Mamurdi

Read also: Top 10 Best Commercial Property in Noida

Read Also: Top 10 Best Luxury Villas in Noida

Read Also: Top 5 Best Luxury Projects in Delhi

Read Also: Top 10 Best Luxury Projects in Bangalore

Read Also: Top 10 Best Luxury Projects in Gurgaon

Read Also: Top 10 Best Residential Projects In Chennai

Read Also: Top 10 Best Residential Projects in Dwarka Expressway Gurgaon

Read Also: TARC Kirti Nagar Delhi

Read Also: Top 10 Best Luxury Apartments in Pune

Read Also: Top 10 Best Luxury Apartments in Mumbai

Read Also: M3M Projects in Gurgaon

Read Also : Assetz Group Property Bangalore Real Estate Developer And Builder