There are a few things to remember when looking for loan options to buy a house.
- You should have set aside money for EMI.
- The cost of the interior of the house
- All legal and administrative fees
- Bank fees - Any potential for late EMI payments and associated fees... and a lot more
Let's take a closer look at these.
Charges on home loans in 2022
Choose the type of house loan you want before applying for one. This varies according to the type of property. There are loans for new or already owned homes (often used by home buyers), renovation and repair loans, and plot and construction loans.
As a result, home loan-related expenses differ depending on the loan.
Aside from interest rates, there are a few fees that apply to all types of house loans. These are the ones:
Home loans require a down payment.
This is the first payment you have to make out of your own cash. That is, you should be aware that when applying for a home loan, the lender will not fund the total worth of the property. If your property is worth Rs 70 lakh, you may receive a loan of Rs 50 or Rs 60 lakh. Because of the LTV ratio, this is the case (loan-to-value).
The LTV ratios are set by the RBI, and all banks and NBFCs must follow them. Banks and NBFCs can be contacted for more information. You may also use a home loan EMI calculator to figure out how much you owe on your home.
Processing fee for a home loan
Processing fees are charged by mostly all providers. This is mostly for the purpose of processing your home loan.
Financial institutions charge different processing fees. Some charge this fee for a set period of time, while others charge it as a percentage of the loan amount, such as 0.5 percent or 1%.
For example, the processing charge for an SBI Home Loan is 0.4 percent of the loan amount (as per public information available online). Similarly, the processing charge for an HDFC Home Loan is 0.5 percent of the loan amount, with a minimum of Rs 3,000 and a maximum of Rs 10,000.
During special occasions, some lenders remove this fee on home loans (or any loans). This is more common during the festive season.
There are additional fees associated with a home loan. Administrative expenses, legal fees, switching fees (when you switch a loan to a new lender), and late payment fees are all examples of these fees. At the time of loan application, most lenders provide a list of fees that the borrower/homebuyer would be responsible for.
If it isn't available, you should contact the lender and request a list of charges.
Property inspection fees and annual service fees are also charged by banks and other financial institutions. While these fees must be paid in advance, they can be worked out with the lenders. You also work with one of the loan agents. You may then have to pay for them as well.
Your credit report is one of the most important factors when it comes to deciding your eligibility for a particular loan.
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