Home loans are taken for long tenures. Therefore, one ought to be careful while selecting a home loan. Interest rates grab most of our attention, but there are some additional charges you might be paying without even knowing that you’re actually paying for that! India’s First Free Online Financial Advisory, Moneymindz
Here are six lesser-known charges related to home loan you have to know
1. Repayment mode
You might have requested your lender to change your existing repayment mode while servicing your home loan. Many borrowers do that. While some prefer ECS mode, others prefer the post-dated cheque. Home Loan Financial Advisory MoneyMindz. The catch here is that many lenders levy a fee for switching your home loan repayment according to the requested mode of the borrower. Though it varies from lender to lender, such fees usually go to Rupees 500 per change.
2. Franking charges
Most lenders levy franking charges when processing your home loan application. This is commonly referred to as stamp duty fee, which actually is a tax levied by the state government on any form of financial transaction that involves the transfer of rights of a property. The quantum of charge differs from state to state. India’s First Free On call Financial Advisory, Moneymindz
3. Rate conversions
Borrowers often request lenders to change, switch or reduce interest rates. This could be done for many reasons. Lenders set limits on the frequency request. This switching doesn’t come without a fee, which differs from lender to lender and goes up to a maximum of 2% of the outstanding principal amount or the limit the lender sets.
4. Central Registry of Securitization Asset Reconstruction and Security Interest Charges
CERSAI(Central Registry of Securitisation Asset Reconstruction and Security Interest) is the central online security interest registry of India. Its primary motto is to prevent frauds which take place due to several loans are taken against the same asset from various lenders. It contains a central registry of all details of the borrower, loan, asset for which the loan was taken, etc. Lenders can look at the CERSAI website to find out if the property against which they are about to lend money has pre-existing security interest due to another due loan was taken in the past. Certified Financial Planner, Kuber Mindz, Moneymindz
5. Overdue charges on EMI
In the occasion of you delaying or missing EMI payments, you are liable to pay charges as a penalty. Penal interests are attracted which goes as high as 24% per annum (2% per month). To ensure that you are financially capable of repaying it completely on time, before taking the home loan.
6. EMI bounce charges
If you don’t maintain sufficient funds in your bank account to pay monthly EMI on the set date, irrespective of the mode you use for payment, you would be slapped with additional charges. These charges are different for each lender. Smart Financial Advisor, Kuber Mindz
If you want further information or any guidance, feel free to visit www.moneymindz.com or give a missed call to 022-62116588