What you need to know when applying for home owner loans
In this article I will be writing about the check list needed while applying for the home loans. If you are not aware of all the fees and hidden charges on the home loans, you will have to pay more money that you would have been saved if you analyze the home loans with different banks. This article will explore some of the facts that you required to analyze before applying for a home loans. You can read our article on Income tax benefits on home loans
List of facts to be known
When you are applying for a home loan, you must be knowing the following facts.
1. Processing Fees
2. Administrative fees
3. Legal / Technical charges
4. Stamp duty
5. Prepayment / Foreclosure charges
6. Switching your home loans to other banks
Processing Fees
Most of the banks charge you the home loans processing fees which is
not refundable. It is better you can learn what is the amount they
would be charging as the processing fees. Mostly it ranges from 0.5% -
1.0%. I have written detailed article about the processing fees and
home loans. Read this article to know more about the processing fees
involved in home loans.
Administrative fees
This fees is specific to the bank which is charging for the
administrative task done for sanctioning your loan. Most of the banks
may not charge you the customer, but it is better to check with the
lender. It is different from the processing fees involved in home loans.
Legal / Technical charges
This fees is for the lender to do any of the legal investigation done
for your house before sanctioning the loan. This is done to verify your
properties builder with the legal entity and the authority of the land
approval to avoid any problem in the future.
Stamp duty
You will have to pay the stamp duty to the government on your home
purchase transaction. These charges differ from state to state and
depend on the amount you are taking as the loan.
Normally, the
charges range anywhere between Rs 2,000 and Rs 4,000 for loans less
than Rs 1000000 and for loans more than Rs 1000000, the stamp duty can
range anywhere between Rs 7,000 and Rs 9,000.
However, with
revised rates home loan seekers will have to pay 0.25 per cent more
upfront for loans up to Rs 10 lakh and 0.50 per cent for loans over Rs
10 lakh. Many banks also recover the stamp duty paid on the
registration of the loan agreement.
Prepayment / Foreclosure charges
mortgageIf you are foreclosing your home loans or prepaying the part of
loans may charge you the extra fees from the bank. It is better while
applying the loan itself ask them what is fees for prepayment and the
foreclosure of the home loans. It is normal practice and good idea to
prepay the loans when you have surplus money in your bank account, but
if the bank is charging you more penalty on the prepayment, you have to
see the different banks who is better in the foreclosing charges.
Switching your home loans to another bank
You have paid the 50% of the home loans and in that time interest rates
in the other bank has come down compare to your current lender. You
would be thinking of switching your loans to the lower interest rates.
Then you will have to ask them the fees and charges involved in that.
You can read this article about Switching Your Home Loans to Another
Bank. This article provides in-depth knowledge on how to switch your
loans to another bank.
Summary
In this article I have written about the facts involved in applying for
the home loans. As mentioned,Processing Fees,Administrative fees,Legal
/ Technical charges,Stamp duty,Prepayment / Foreclosure
charges,Switching your home loans to other banks are the few points you
have to consider. There will be other aspects to be considered depends
on the home loans nature which I have not written here. If you have any
doubts please post it in the comments section. I am happy to answer
your questions!!!.
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