Home loan is very helpful for home buyers. Nowadays most of the people take home loan. While taking loan, banks give information to customers about home loan interest rates and processing fees etc., but there are many charges which are levied in exchange for all the services of home loan, but banks do not give information about them to the customers. Know about them here.
Application fee
Many banks charge application fee from you while applying for loan, it is also called login charge. This fee ranges from Rs 2,500 to Rs 6,500. After getting loan approval, it is adjusted in the processing fee of your loan. But if your loan is not approved then the banks do not return it.
Foreclosure charge
There is no charge on home loan prepayment normally, but if you pay the entire outstanding amount to close the home loan before the tenure is over, then the bank can charge a foreclosure charge on it. It is between 2% to 6% of the outstanding amount. However, banks have certain rules regarding this. They also apply them.
Switching charge
If you convert a floating rate loan into a fixed rate loan or a fixed rate loan into a floating rate loan, then the bank charges you a conversion charge in return. This is also called a switching charge. Usually, it can be from 0.25% to 3% of the remaining loan amount.
Recovery charge on home loan
If you do not pay after taking a loan from the bank, then the bank declares you a defaulter. In such a case, the bank takes action against the customer for recovery. The money spent in this process is recovered from the customer.
Inspection fee
A team of experts from the bank comes to assess the value of the property for which you are taking a home loan. These experts evaluate the property on many parameters like statutory approval, layout approval, building specifications, construction norms etc. Banks charge you a fee for this inspection work. Many banks include this fee in the processing fee, while some banks charge it separately.
Legal fee
Banks appoint legal experts to find out if there is any legal problem in your property. These experts check the title deed, property ownership history and depreciation, no objection certificate (NOC), occupancy certificate etc. After this, those experts give their final opinion to the bank whether they should give the loan or not. Experts are paid a fee for these services, which is called legal fee. Banks also apply this fee on your home loan.
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