Home Loan: If you are taking home loan to buy a house, know what are the charges...


Owning a home is everyone's dream. Buying a home is one of life's biggest purchases. In India, most people take loans to buy a house. A home loan is the loan with the highest amount and longest tenure. Therefore, before taking a home loan, compare the offers offered by different banks. Also, check one more thing. These are the charges along with the home loan. These charges vary from bank to bank. Let us know about these charges.


Home Loan Application Fees
When you apply for a home loan, an application fee is charged to process your loan application. This fee is non-refundable. Whether you get the loan or not, you have to pay this fee. Therefore, before applying for a home loan, make sure that you want to take the loan from the same bank.

Processing fees can be waived off
Apart from the application fee, the processing fee is also charged. This fee is taken along with the loan application. This is non-refundable. Customers can also get this fee waived or reduced. Some institutions offer the option to pay a part of this fee along with the loan application and the other part before getting the loan.

Legal fees
External lawyers are hired by financial institutions to investigate the legal status of the property. For this, the fees charged by lawyers are collected by financial institutions from their customers. If the property has already been legally approved by the institution, then this charge is not applicable. You should check with your bank whether the property to be purchased has already been approved. If so, then your legal fees can be saved.

Mortgage deed fees
This is a big change when taking a home loan. This is usually in the form of a percentage of the home loan. However, some financial institutions waive this charge to make the home loan product more attractive.

Commitment fee
Commitment fees are also charged by some banks or NBFCs. After processing and approval, a commitment fee is charged in case the loan is not availed within the stipulated time period. This is a fee that is charged on an undisbursed loan.


Prepayment penalty
When the loan borrower deposits the money before the end of the loan tenure, it is called prepayment. In such cases, banks impose a penalty. This charge varies in different banks. However, the Reserve Bank of India has directed all banks not to charge prepayment penalties on home loans taken at floating interest rates. For fixed-rate home loans, a flat rate prepayment penalty is charged which is up to 2% of the amount paid upfront.

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