Legal valuation charges of home loan:-
Apart from checking the personal goodwill of the home loan borrower, banks also observe & conduct various checks on the property for sale.
Because, it is the only property as a security against the loan, so, no any doubt should be left in ensuring that the bank is lending money against a secured property. This is why banks carry out some legal verification of the property, for which they will grant loans.
The charges will depend the lender or the bank from which you are taking the loan. Usually, the bank will ask you to pay minimum fee of RS. 3500 onwards as per the bank policies.
Bank will ask you separately for Legal Charges, Some bank Included their legal fee in processing fee and some bank take charges separately. Some of the lender asks you to pay their processing fee before the loan process begins.
Important fees and charges of home loan:-
- Loan processing charges:
The one-time fee charged by the lenders on the applicants for processing their home loan applications is known as processing fee. This fee is generally non-refundable. This fee can be charged from the borrower up to 3% of the loan amount. Some lenders also waive processing fees during festive season offers or other occasions.
- Foreclosure charges:
This fee is levied as a penalty if a borrower repays his entire loan amount before the end of his tenure. Some lenders do not allow the closure of the loan account until the repayment of the prescribed loan number. RBI has prohibited the imposition of foreclosure charges on floating interest rates. Lenders offering fixed rate home loans are free to decide whether to charge foreclosure fees or not.
- Partial pre payment charges:
This fee is levied as a penalty when a borrower prepays a part of the loan amount.
However, floating rate home loans are exempted from prepayment charges, if availed by individuals. In a case where individuals opt for a dual rate home loan, lenders may levy a prepayment penalty during the fixed interest rate tenure. Once the loan starts accumulating at a floating rate, banks and HFCs cannot levy a prepayment penalty.
- Penal Charges / Default Interest / Late Payment / Overdue (Per Month):
Penal charges are levied on the outstanding EMI for default in the monthly installments of the home loan. This fee can be either a fixed amount or a pre-determined percentage of the EMI that is unpaid.
- Conversion fee
The conversion fee charged by the Banks and NBFCs, for converting their floating rate home loan to a fixed rate home loan or vice versa or to convert the existing fixed interest rate into a revised interest rate.
- Administrative fee
There are Many of the lenders who charge an administrative fee in advance to their processing fee. This is non-refundable fee which is charged to cover the legal verification expenses , verification of documents and valuation of property. Borrowers should compare these charges while evaluating their home loan options. It is Prefer to the lenders who have fixed administrative fees or upper limits.
Frequently Asked Questions
What all charges are involved in home loan?
- Home loan processing fee
- Home loan administration fee
- Stamp duty and registration charge
- GST on home loan
- Technical/legal assessment fee for property
- Home loan documentation charges
- Credit score report charges
- Fee for change of home loan tenure
- Loan conversion fee
- EMI late payment penalty
- Home loan prepayment charges
- Charges for home loan account statement
- Home loan re-sanction charges
- Cheque bounce charges
- Incidental charges on home loans
What are the loan processing charges?
Loan Processing Fees: The bank has to bear certain administrative costs while processing and sanctioning your loan. This is a small amount, which varies from bank to bank and usually costs around 0.5% to 2.50% of the total loan amount.
Is the processing fee refundable?
This fee is usually a fixed percentage of the loan amount and is completely non-refundable. The processing fee ranges between 0.5% of the loan amount or Rs 3,000 (whichever is higher) plus applicable taxes.
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