Hidden Charges You Can Expect on Your Home Loan

When you buy a home and scour through the myriad of home loan products available to you, you’ll notice that rate tables often display basic details of the product, loan tenure, interest rate and the approximate monthly EMI applicable in each case. But besides these, there are a few other charges that may also apply when you get a home loan. Let’s take a look at these hidden fees and charges: 
 

i)  MODT Charges: MODT or Memorandum for Deposit of Title Deed is essentially an undertaking by the borrower stating that they have submitted the title documents of the property with the bank at their own free will. This charge may vary depending on the state you’re taking the loan from. 

Karnataka – 0.2% of loan amount 

Delhi – NA 

Gurgaon – NA 

Pune/Mumbai – NA 

Hyderabad – 0.1-0.5% of loan amount 

 
ii) Processing Fee: Also known as loan origination fee, this fee is levied by the lender to process your loan application, and is usually a small percentage of the loan amount you apply for. The charge may vary from lender to lender and may even change at their discretion.  

Check the table below to know the processing fee charged by our partner lenders. 

Note: Interest rate and processing fee is subject to change at the discretion of the lender. 

iii) Home Loan insurance: This is not always mandatory and may depend on the lender. However, Fincity recommends that you opt for a Home Loan insurance to protect your family against the burden of loan repayment in case of temporary/permanent disability, loss of job, death or any such eventuality. To make the payment more comfortable, most borrowers opt to pay the insurance premium along with the monthly loan EMI. 

iv) Khata affidavit (if khata is not available): This is a legal document used to compute and file property taxes in Karnataka. It’s not a property ownership document – it simply identifies that the owner is liable to pay property taxes. A Khata includes property details such as owner details and the property identification number, size, location, built-up area, carpet area and tax assessment. This document is required when you apply for a home loan. 

In case you do not possess a khata affidavit, some lenders may charge a franking and notary fee of Rs.200 while others may not levy a charge for this. 

v) Home Loan Balance Transfer annexure: In case you refinance your home loan, i.e., transfer an existing loan to a new lender at a better rate, you will need  a home loan balance transfer annexure. Generally, Rs.200 franking and notary charges apply for this. However, some lenders do not charge a fee for the purpose. 

Besides the abovementioned charges, the lender may levy an administrative fee for recordkeeping of your loan, document charges to retrieve documents during closure or pre-closure of loan, a property inspection fee, legal fee, etc.

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