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Charges on a home loan that everyone should know.

When you take a home loan, you don’t just pay the EMI on the loan. there are as many as 13 different charges, though not all of them apply to every case.

1) Application Fee:

Covers the preliminary expenses of a bank for conducting verification. Rs 1,000-Rs 5,000.

2) Processing Fee:

Covers the cost of the credit appraisal. Fee depends on borrower’s profile, income and the type of loan. Rs 10,000-1% of loan.

3) Administrative fee:

Some lenders split the processing fee into two parts. The one charged after the loan is sanctioned is called admin istration fee.

4) Technical evaluation Fee:

For high-value properties, two valuations are done, and the lower of the two is considered for sanctioning a loan. Some PSU lenders charge a fee for doing this evaluation.

5) Legal fee:

Most lenders engage firms to scrutinise borrowers’ legal documents. Generally, banks include this cost in the processing fee, but some PSU lenders charge it separately.

6) Franking fee on sale agreement:

In some states, there is a stamp duty payable on the property agreement with the builder/seller. 0.1% of cost-Rs 20,000.

7) Franking fee on loan agreement:

Some states, Maharashtra and Karnataka, for instance, levy a fee on the loan amount. 0.1-0.2% of loan.

8) Notary fee:

If you are an NRI, then your KYC and the POA (power of attorney) needs to be notarised by the Indian embassy or a local notary available abroad.

9) Intimation of registration fee:

Intimation to the subregistrar’s office is a new process. Followed only in Maharashtra. Rs 1,300.

10) Indemnity cost:

The borrower needs to indemnify the lender for certain risks, for instance, if the builder faces a delay in receiving an approval or the property tax is yet to be paid fully by the seller, or some other.

11) Adjudication fee:

To start the process for a home loan application, if you are the POA-holder of an NRI, the notarised POA needs to be adjudicated here in India before submission to the lender.

12) Fire insurance fee:

Most lenders who are into bankassurance insist on this.

13) Documentation fee:

For getting the loan agreement signed, getting the ECS mandate activated and a few other formalities, some lenders charge this fee. Rs 500-Rs 2,000.

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