Know all the associated costs of your home loan before you apply

There are 18 types of charges you may have to pay on home loans. Do keep in mind all of these charges may not apply to every borrower; so before applying for a home loan know what are the fees you may have to pay on home loans. Also, these charges will vary across lenders including the percentage of fee or minimum amount of fee. Some lenders may levy charges separately while others may club several components lumped into one fee. Some charges are fixed amounts, whereas others are linked as a percentage of the home loan amount. So ask the lender to give a loan document or write down all the costs associated while sanctioning the home loans to get the full picture of the charges, and compare them with other lenders. Nevertheless, all of the charges in the below list may not apply to every borrower. These charges include;

1. Log-in fee/Application fee:
2. Loan origination or processing charges
3. Re-appraisal fee: (Applicable only in case the borrower did not take the loan within the validity period of Sanction endorsement.)
4. Administrative charges,
5. Documentation Charges,
6. Legal fee,
7. Valuation fee/Technical inspection fee,
8. Recurring annual service fee/Annual Percentage Rates (APR)
9. Late payment Charges,
10. Charging for the change of loan tenure
11. Switching to a different loan package during the tenure of the loan
12. Restructuring of loans,
13.  Changing from fixed to floating interest rate loan and vice versa,
14. Document retrieval charges
15. Pre-payment charges, if you want to prepay the loan.
16. Pre-EMI charge
17. Franking fee (for stamping of home loan agreement): This charge is applicable only in a few states in India like Maharashtra and Karnataka. The franking charges are generally 0.1% of the home loan value.
18. House Insurance premium (Fire, earthquake, etc.)

Every lender should be able to give you an estimate of its fees. Many of these fees are negotiable / can be waived also.

Besides, an NRI availing a home loan then KYC documents, and the POA (power of attorney) need to be notarised by the Indian embassy or a local notary available abroad for which you will need to pay the applicable fee. Further, the Power of Attorney of the NRI needs to get the notarized POA adjudicated in India for which he has to pay the relevant fees.

While planning your finances, don’t forget to include these associated costs, besides the costs of stamp duty and registration.

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