Planning to buy your first home? Then this is going to be the biggest moment in your life as well as your family. But have you done your complete homework before approaching for a home loan in 2016? Taking a home loan may not take much time if your salary is good enough or the property price is not that much. In fact bank people will help you in each and every step to get it done. But have you ever thought about whether there are any additional charges applied besides EMI? In this article I will share such 5 home loan hidden charges that you should know and ask your bank before applying a home loan in India.
Common Hidden Charges in Home Loan in India
Mostly people forget to enquire about these common home loan hidden charges due to excitement of buying a new home or by trusting the bank stuffs too much. You should know these charges to avoid any kind of unnecessary surprises in future. Let’s check few such expenses below.
1. Processing Fee: Processing fee is the first expense that every bank will charge to process your home loan application. Now a days you might have noticed that banks are offering discounts on processing charges too. If you can negotiate better then you can save some money here.
2. Inspection or Legal Fee: When you apply for a home loan, every bank do an inspection of the property for which you have asked for a loan. There are couple of other legal stuffs for which bank generally have their own legal team. Just ask your bank whether they are charging you for such inspection in the name of legal fee.
3. Document Retrieval charges: This is a very important note many people don’t bother much while taking a home loan. Home loan repayment is a very long procedure. Generally we take loan for 20-25 years and mostly repay in lesser time. But still it is a very long time. In that period in case you have lost some document do you know whether it is a chargeable process to get it back or get a duplicate copy?
4. Switching Loan charges: Another important factor is home loan switching charges. In fact this is a very common story in this sector. Initially many people take loan from any bank who ever is allowing their demand. But later you find that another bank is offering lowest Home Loan interest rate compared to other banks then obviously you can switch and save money. Check out with your banks how much they are charging for switching your home loan to another bank and how easy the process is.
5. Late Payment charges: What if you forget to pay the EMI of your home loan and not able to pay due to some financial crisis in your life? Is there any flexibility your bank is going to offer in case you are not able to pay or how much charges are applicable in case you pay your EMI late?
There are couple of more such hidden charges you can ask your bank on advance. E.g. changing loan tenure, copy of original documents, pre-payment charges, any kind of administrative charges etc. Whatever the charges are, make sure you ask your bank clearly and also read all the documents clearly before approaching a home loan in 2016.