Home Loan hidden charges are back in limelight as the banks are finding newer ways to make more money out of you. Home Loan hidden charges is a grey area & there are no clear cut guidelines regarding same. In India, transparency takes a back seat and regulatory bodies are also turning blind eye towards Home Loan hidden charges. I receive lot of complaints from my readers so i decided to write a post on this topic. Like the amount charged there is no standard definition of home loan hidden charges as banks keep moulding the definitions as per their convenience. Lets go though each of these Home Loan hidden charges
Conversion Fees
The most common among all Home Loan Hidden Charges is Conversion fees. It is the amount you need to pay to reduce your Rate of Interest during loan tenure e.g. You took home loan @ 12% i.e. Base Rate of 10% + 2% mark up. Now over a period of time bank reduced mark up for new customers to 0.25% & now offering home loans @ 10.25% but you are still paying 12%. Now you can decrease your ROI only by reducing mark up from 2% to 0.25%. For this bank will charge conversion fees. It varies from 0.5% to 1% of outstanding loan amount.
MODT Charges (Memorandum of Deposit of Title Deed)
Memorandum of Deposit of Title Deed is an undertaking by the borrower that he has deposited the title documents of the property with the bank at his own wish and will, in order to secure the financing obtained from the bank. Govt levy stamp duty on this document to register the same…Charges vary from state to state but is normally 0.1% to 0.2% of Home Loan amount. It is one of the most imp Home Loan hidden charges :)
Document Retrieval Charges
Document Retrieval Charges are the charges levied at the time of loan closure/pre-closure. It is basically a cost of transferring original documents from central document repository to the borrower. Normally all original documents received by banks are divided into 2 parts i.e. (a) Most Important documents like Sale Deeds, Sale Agreement etc and (b) General Documents like Khata, NOC from association etc. Most important documents are kept in safe custody at central repository and is being normally managed by 3rd parties. General Documents are kept at Loan Location.
Suppose you availed Home Loan in Chennai from HDFC Ltd. The central repository of HDFC is in Mumbai. All important documents will be shifted to Mumbai and general documents will be in Chennai. When the loan is closed, HDFC will charge document retrieval charges to transfer documents from Mumbai to Chennai. Best in class courier service is used for safe transfer. At the time of availing loan these charges are included in processing fees.
Administrative Charges
It should not be confused with Processing fees. Some banks charge administrative charges separately. These charges are levied to recover administrative cost of processing application. If we loosely define then processing fees refer to front end cost like DSA cost etc whereas administrative charges is levied for back-end processing of loan application. Bank might waive off processing fees but administrative charges will make up for same :)
Legal Fees
Banks like SBI don’t have in-house lawyers to validate legal status of the property. They hire external lawyers for this job. The fees of these lawyers is being recovered from customers under the head Legal Fees.
Valuation Fees / Inspection Fees
Before sanctioning the loan, physical inspection of the property is done to fix the property valuation. It is done to ascertain that bank is not over lending because in case of default, bank can recover their dues only by auctioning the property e.g. If property valuation is 1 Cr and bank approve loan of 1.2 Cr. In this case bank cannot recover the dues in case of default. Obviously these charges are recovered from customer.
Documentation Charges
Home loan require lot of documentation like Home Loan agreement, MODT, Indexing etc. Though standard formats are used still there are charges involved in completing this documentation.
Switching Loan Package
In case you availed floating Home loan at the time of application and now wish to shift to fixed Home Loan or vice versa. Sometimes you wish to change your Home Loan package from one to another though loan remain linked to floating ROI. In all such cases bank will charge normally 1% of outstanding loan amount to process your request.
Changing Loan Tenure
If you to wish to increase/decrease your monthly EMI during loan tenure thus resulting in change of Loan Tenure. Bank might charge fees for the same.
Statement of Account
One annual account statement is free but in case you misplace or don’t receive & request another statement from bank then bank might charge upto Rs 500 per statement.
Copy of Original Documents
It is advisable to keep 2-3 copy of original documents before submitting to bank. if you request for photocopy from bank then bank might charge for same. Charges vary from Rs 2 per page to Rs 1000 for entire set.
Recovery Charges
If you default on payment then bank will charge entire cost of recovery i.e. Recovery Charges from you. Charges may vary from Rs 250/installment, some % of recovery amount or Actual recovery expenses incurred by bank if recovery is under SARFAESI ACT.
Pre-Payment Charges
Though pre-payment charges are abolished but only for floating home loans. Some banks charge pre-payment penalty if funding is not from own source i.e. 3rd party funding including take over by other bank. Pre-Payment penalty still applicable for fixed home loans or loans availed under special schemes. This head is princess of Home Loan Hidden Charges :)
List of Documents
Quite strange but you might need to pay to get the list of original documents submitted by you with the bank.
Late Payment Charges
Last but not least any delay in EMI payment might be costly affair. Banks charge Late Payment Charges of Rs 250 + 2% additional interest as penalty on amount due.
Home Loan Hidden Charges list can go on but i tried to include almost all the important Home Loan Hidden Charges. If i missed any then please feel free to add through comments section of this post. Also note that banks might not charge all the above mentioned Home Loan Hidden Charges. Its advisable to check with bank on all these charges to avoid any future surprises. Sometimes most of these charges are clubbed under one head i.e. Processing fees.
Imp Note:
1. RBI website has FAQ on Housing Loans. CLICK HERE to go through the same before availing Home Loan.
2. The Home Loan Hidden Charges mentioned in this post are tentative and exclusive of Service Tax.
Copyright © 2011-2013 Nitin Bhatia. All Rights Reserved.
Dear Sir,
I had very good experience with SBI, Panambur, Mangalore, Karnataka.
Availed a home loan in 2010 and closed by now before moving from there.
I find them mostly transparent and with least hidded charges.
Regards,
Kamlesh
I agree. Being a PSU bank, SBI is most transparent among all.
very useful. thanks
LICHFL is the worst agency, esp in bangalore- both area office in JP nagar and regional office in cantt, bangalore. they charge penalties heavily. recovery managers are terrors, even spoil reputation in your relatives and friends , for no fault of ours. thier mistakes are hidden.
SIR I WANT TO KNOW TAKE OVER CHARGES POSSIBLE IN HOUSE LOAN TAKE OVER BY OTHER BANK
You need to incur all the charges incurred while availing new Home Loan.
Changing Loan Tenure — Is it possible to pay more than the EMI without incurring any fees? Any bank that allows paying more than EMI to finish of loan quickly?
You may request bank to increase your EMI. There is NO FEES attached to it. Increasing EMI is your choice. Please note that reducing EMI is always at banks discretion therefore before increasing EMI, pls evaluate the same thoroughly.
I have taken a top-up loan. Do we need to sign a ‘Mortgage of Deposit of Title Deeds ‘ with SRO? Thanks.
Your property is already mortgaged therefore not required.
What are charges for getting list of documents submitted to the Home loan
Also, Is it advisable to transfer home loan from one bank to another bank for rate of interest and rate of changes in interest rates (like daily reducing/monthly reducing/quarterly reducing).
There are no charges. Reg 2nd query, it depends on situation. It require cost benefit analysis.
How much is the valuation/inspection fees. I have been demanded Rs 10,000 for this process.
Is this amount justified.
There is no standard fees. You may clarify from bank. If processing fees is waived off then this fees is very high.
Bank of Baroda has approved/financed a project in Bangalore South.
1. Is it advisable to take loans from a bank that has financed the apartment project, since their sole aim would be to recover of loans given to the builder for building of apartments, and they can turn a blind eye to any deviation?
2. Bank of Baroda (BOB) which finances a project in Bangalore says that the said apartment project does not have any deviation. But another person who purchased a flat in this project said that there was slight deviation and also that a nationalized bank approved his loan knowing well about this deviation. When this was discussed with the manager of BOB, he says that they may not be aware of any deviations that are caused later, and that he needs to check if the project can be re-verified for any deviations. Also he said that the builders will manage to get the NOC from BDA (possibly using unfair practices). So, who can verify the project physically to determine if there is any deviation, since external lawyers can only verify the documents that is available to check its legality.
3. Some banks like Vijaya Bank say that married persons must take loan with the co-applicant and not alone, while I prefer to have to have the new apartment with sole ownership.
4. The apartment project is just 2 months short of occupation. The marketing dept of the builder asks for 20% of the price of apartment to be paid 15 days from the date of giving the token advance, and 50% of the price 10 days from the date of signing of agreement. I hope the legal and physical inspection can be done before the agreement is signed. But if I go for housing loan, I suspect that this schedule for payment cannot be achieved. Please advise on the same.
5. If the builder has promised CC and OC, is it a confirmation that this promise will be kept, or that there is clearly a chance of violation of the same? Till OC is provided, banks will hold back 5% of the total price of apartment to the builder. So, will the builder harass the owners of the apartments, and if yes, how can this situation be avoided ?
6. Builder has mentioned a clause in the draft agreement stating that he has the right to build additional floors as may be duly sanctioned and that the owners of apartment have no right to question or block the same. Is this clause acceptable?
7. Developer mentions that thought the occupation of apartment is possible in the month of June, they still reserve the right to extend it for 3 months (grace period) which is not questionable. After the expiry of grace period if the apartment is not complete, they will pay Rs 10,000 to the owner of flats towards their rent expenses to the apartment owners.
8. As per the draft agreement, the maintenance charges would apply from the period when the lift and electricity is provided to the respective apartments/blocks. It mentions no word about provision of water to the apartments.
9. The developer of the said project has sent draft of two documents – one is construction agreement and the other sale agreement. Just trying to understand the reason and purpose of the two documents.
10. The developer says mentions the following “They shall be entitled to carry on various amenities work, even after the handing over of possession of respective property in tenantable condition. Some of the amenities may not be available at the time to possession but will be provided in the due course of six months to one year. The developer shall not incur any liability if the completion of the Property is delayed for reason of non-availability of steel, cement, and or water supply, electricity or power or by any reason of war, civil commotion or any Act of God or due to any notice,injunction or stay or other court order, change in law, notification of the Government or anyother public or competent authority or for any other reason beyond the control of developer. Without water how can the developer call it tenable. The developer has many such clauses to protect them under all eventualities.
“The Developers shall make every effort to obtain Commencement Certificate, Occupancy Certificate, Electrical, Water & Sanitary connections within the date stipulated above.However, the Developers shall not be responsible for delays”.
The developer mentions that the Apartment owner shall take possession of the said property within fifteen days of the Developers giving a written notice to the Apartment owner that the said property is ready for residential use. The criteria required to confirm that the apartment is ready for occupation is not mentioned anywhere in the agreement draft.
The Purchaser shall duly and punctually pay the proportionate share of MunicipalTaxes, rates and cesses, insurance charges, cost of maintenance and management ofthe Building, charges for maintenance of services, like water, sanitation, electricity etc., salaries of the employees of the Organizations and other expenses in regard to the building as may be determined by the Vendor/Developer from time to time, till the association is formulated. It also mentions that the association will be formed by the builder as per his discretion. First years maintenance is also charged to the buyer before registration of the apartment. So, the earlier clause appears to be a mischief. The builder can delay formation of association to ask for more money.
Is there an agreement template that can make the apartment purchaser’s position safer, and will the developer agree to the same?
A quicker reply to the above mentioned questions will help, since I have already paid the token advance and now await verification of the documents by a lawyer, and then I will need to go for home loans.
This forum is only for general discussion. For any personalized consultation on chargeable basis, you may check Paid Services section.
What is the stamp duty cost for memorandum of deposit of title deed for a loan > 10 lakhs in 2015-2016?
Missed the state information. My question is about Bangalore, Karnataka.
HDFC is telling me that it was 0.1% till march 2015 and is now 0.2% in 2015-2016. Is that correct? Please suggest.
Thats correct.
Thanks Nitin.
Another question. The TDS rule of 1% deduction from buyer side if the value is > 50 lakhs, does that apply on the registration value or the total sale value? I mean, if I register my flat on guidance value which comes below 50 lakhs, am i still liable to cut TDS, even though the overall property cost was more than 50 lakhs?
Are there any negative points on registering the property on guidance value instead of sale value? Any troubles in reselling? What about the difference amount between guidance value and sale value in such a case?
Kindly suggest.
You are still liable to deduct and deposit TDS. TDS is linked to cost of property and it has no corelation with guidance value or circle rate.
You can register at guidance value. It is perfectly legal.
What is SARFAESI charge
Please check following link
https://www.cersai.org.in/CERSAI/JSP/IBACRTermsConditions.jsp
what is the purpose of MoTD of sale deed. will change in banks require this to be done on Sale deed.?
I have explained it in my post. Please go through the same.
Recently I have applied home loan in LIC HFL and it was sanctioned. They didn’t mention the MODT fee before santioning the loan but now they are telling 14k modt fee is mandatory. Is it our wish pay MODT Fee? or should we pay? I didn’t find in terms&conditions. Wha is secure financing here ?
It is mandatory
Thank you Nitin for quick response. one quick question. Is there any extra charges to release the documents from mortage after loan closed?Shall i proceed with LIC HFL? or shall i moved to HDFC loan?
LICHFL charge some document retrieval charges. You may clarify from LICHFL for any other charges.
Hi Nitin,
I have recently done MODT for my flat by LIC agent, but due to missing a original copy of development agreement LIC cancelled my Homeloan. But he done MODT for 15000.
How to cancel my MODT ? and what is the procedure to request my Processing fee from LIC ?
You may submit written request for cancellation of MODT and take acknowledgement. Any charges paid towards MODT and Processing fees are non-refundable.
Thanks Nitin, for informative post. Can one e-file MODT in Maharashtra without visiting the registrar’s office? In SBI, agents are charging 1,800 for MODT while the actual charges are 1,300. They claim that one needs to go to registrar’s office a couple of times and need a 100/- stamp paper to complete the processing.
You may check with Sub registrar office regarding the same.
Thanks Nitin, did that and they also claim that one needs to submit the physical documents which makes it confusing. Ended up paying the agent to get it done. Dear Readers, did any of you try successfully e-filing MODT? Please share your experience with others so that others can are not taken for a ride and save their hard-earned money.
I have been asked to pay 0.2% of loan amount + 1000 rs filing fees + 1100 (don’t know what is this for) + 570 rs for central registry + 110 notary + 500 franking charges. When I am checking online, I do not find any information but only 0.2% of loan amt + 1000 + 300
Bank in this case is SBI
You may clarify with SBI in writing. Most of them seems to be “illegal” collection.
Hi NItin,
I just got into this hidden charges mess.
Got an HDFC loan sanctioned for 60 L, wanted only 35L.
I had filled 10 % in resources from Family(though i would be from my salary) in Loan Details Estimate of Requirement of Funds > in home loan form and 10 % Savings,50% in Others as Salary And 30 % as loan requirement.
agent said, i will not get the loan sanctioned.
So i made 15 % from family and saving and 75% from Loan, Thinking that i will go with my original plan
Now i had my first payment demand. and i saw this .2% stamp duty on HOME LOAN.
what are my chances ?
Can i get the sanctioned amount change back to 35L, so in order to save some money ?
Will there be something like this in future too ?
Thanks
Regards
It seems to be MODT charges. You may clarify from HDFC regarding the same.
Hi Nitin,
I am also looking forward to transfer my home loan from LIC to SBI and here is the list of charges I’ve been asked to pay
at LIC:
500 for List of Documents + service tax = 570/-
2700 + service tax = 2900/- approx for Document retrieval
at SBI branch A:
0.2% of O/S loan as Stamp duty
4000/- advocate charges
860/- valuation fee
0.25% as processing fee if loan SANCTION is not completed by 30 Sep
400 per lac for property insurance
at SBI branch B:
0.2% of O/S loan as Stamp duty + 2200/- extra (not sure for what)
4000/- advocate charges
855/- valuation fee
0.25% as processing fee if loan DOCUMENTS is not submitted by 30 Sep
535 per lac for property insurance
Please help me to understand how two SBI branches have different charges, what all of these are compulsory and what can I get rid off?
Thanks for your help.
Different branches have separate target for Home Loan and they can run any promo offer to waive certain charges. Property insurance is not mandatory. You calculate total cost and opt for cost effective branch.
LIC HFL charges are as per Home Loan Agreement.
Hi Sir,
I have read the Hoan Loan and related articles. Many were very useful and gave lot of information about Home loans. Need some info on Tranche EMI option and accelerated Repayment scheme. Not able to find much details about the same.
I have identified an under construction project and looking for Loan of 30L. After analysing your blogs and related things it seems like PRE-EMI option is not useful for me to go with. My requirement is like I want to reduce my Principle amount after some time which is not possible with all banks as in initial terms majority of Payment will go towards Interest and also in many banks I have to pay just Interest for 1st 3 years. So I am Planning to go with Tranche EMI option. Many banks in Markets are not offering the same. I have options either to go with HDFC (ROI 9.9 which will be on PLR) or IDBI (ROI -10.5 which will be on BR). Please suggest me best option out of these or any other good sectors to go with if any by keeping accelerated Repayment scheme also as one parameter?
You may opt for HDFC.
Thank you very much for your quick response and support. I thought like you would ask me to go with IDBI bank as it is government bank and ROI also on BR which depends directly on RBI guidance instead of PLR. Is there any specific Reason for the same to with HDFC apart from they were leading in the Market in Housing Loan. Also if you have some article on Tranche EMI that would be great and waiting for that.
0.6% higher interest rate will have major impact on interest outflow. It will be financially wise decision to opt for HDFC.
hello sir,
i have one clarification, regarding home loan process,
i have opted for LIC HFL for home loan,
Lic person has cleared around 95 % of requested home loan to builder on construction agreement signing.
still sale deed i;e for land value is not signed.
is this a process that LIC can do …?
thanks you for your time
It depends. It seems that your loan is approved under subvention scheme.
thank you sir for spreading words, Helped me a lot !
I have a os housing loan with LICHFL since 1997 and applied for additional mortgage loan. have i to pay MODT CHARGES.
No
i want to get homeloan for new constructed flat.can i go for HDFC loan or LIC HOMELOAN
I will prefer bank like SBI or ICICI Bank.
Hi Nitin Bhatia,
Thanks for nice Blog :) . In last you write “Sometimes most of these charges are clubbed under one head i.e. Processing fees.” So we really need to pay all this amount under single head or negotiate on some charges and pay, obviously impossible because they have fixed processing fee and we cannot say those charges as hidden if paying full fee.
Please give some ideas how to save those charges while processing?
You may ask for break up of processing fees. Bank can waive off processing fees partially or fully. You can negotiate.
Thanks @nitinbhatia121:disqus for replying. Please give some ideas on what charges we can negotiate, if they do not agree to waive off the fee. Like conversion fee they always ask some amount to reduce the ROI.
It is subjective and depend on the break up shared by the bank.
Hello Nitin,
Many Thanks for the wonderful share. Really useful.
I am transferring my existing home loan from LIC to ICICI, I have transferred my original documents to ICICI. Now, I have register the mortgage loan in the name of ICICI bank.
Do i need to pay MOTD charges? What are all the other charges involved in it.
Regards,
Venkatesh SD
Bank may demand MODT charges. For other hidden charges you may check the post.
Hi Nitin.. I availed a TOP UP loan( 50 Lakhs) last week with ICICI and I was charged 25K plus 5K towards MOD. I see that for a top up loan MOD is not necessary.
I was not sure whether they charged that fees when I took the home loan five years ago.
Who do I complain about this? Or talk to? Any information is highly appreciable
You should submit a written complaint with the bank seeking clarification on same. Also take acknowledgement of your complaint from bank employee. Wait for the revert before initiating any further action.
Hi Nitin
I am looking to buy a property in Bangalore . I have option of PNB bank and HDFC bank . HDFC is charging me Processing fees and other fees like MOD and documentation etc . where the total is coming to approx 25000 . On the other hand PNB is waiving off most of the above charges . the difference in ROI is .15 % . Is this possible or is PNB taking me for a ride . Also PNB says the property insurance and life insurance will be part of the emi and nothing extra .
The loans are from PNBHFL and HDFC Ltd not from corresponding banks. PNBHFL and HDFC Ltd are HFC’s (Housing Finance Companies). I will suggest to avail home loan from a bank like SBI or ICICI Bank.
k . Thanx
Hi Nitin, from the comments I read you are suggesting to take loan from bank rather Home finance company, but what is the difference and advantage I get? TIA.
The key difference is that Home Loan from a bank is linked to Base Rate of the bank which is comparatively transparent way of fixing interest rate compared to BPLR/RPLR of HFC’s. Secondly, cost of funds for HFC’s is high compared to banks. For other points, you may check my posts on Home Loan.
Ok thanks and sure.
Many thanks to you for this clarifications
Just wanted to know that Is SBI provide loan for gram pachayat property because have tried all banks like HDFC, ICICI etc but they refused to provide loan.
Please suggest.
I don’t think so. You may check with cooperative banks or HFC’s like DHFL, Gruh Finance, IndiaBulls etc.
Hi Nitin,
I am interested in a Property which has all slab construction complete and plastering work is ongoing. It is planned to be completed around Aug’2016.
Is it mandatory to Service Tax and VAT on the property payment as per their payment schedule?
Does VAT also apply here or is it relevant to Registration? How to calculate that?
Does it makes sense to go for Interest only/Tranche EMI / Full EMI option, since possession is expected in next 10 months? Also, Late delivery interest from builder to buyer as Rs.3/sqft a decent amount?
Thank you!
1. VAT and ST is applicable as property is under construction
2. Calculation of VAT and ST depend on the method used by builder. Please check following link
https://www.nitinbhatia.in/real-estate/vat-service-tax-under-construction-flat/
3. EMI option depend on multiple factors. I will prefer Pre-EMI
Thanks a lot for quick response Nitin. Could you also clarify if Late delivery interest from builder to buyer as Rs.3/sqft a decent amount?
Nitin ji, I have one more question..Currently my wife is not working to support kid, but may start working after a year or so. In any case, I will be actually paying whole EMI. Should I still go for joint ownership and loan for saving taxes for both? if so, can we choose %ge share or it that not relevant for tax rebate?
If you will be paying 100% EMI then your wife will not be able to claim tax deduction even in case of joint ownership/borrowing.
These clauses are eyewash and if you read the complete clause then you will realize that it is next to impossible to claim such penalty/compensation from builder. You may ignore these clauses in the agreement.
Hi Nitin,
1) For under construction property in Thanisandra, builder is charging BESCOM+BWSSB(deposit & connection charges) @Rs.140/sq.ft. Is this correct price?
2) How much is STAMP DUTY & REG. in Bangalore?
3) Since possession is planned in Aug’16 can I still delay sales deal till then to avoid ST? If so, Are there any consequences/risk?
Also, for Home loan HDFC has MOD: 0.2%, SBI: 0.3%, Indiabulls: Nil
Considering other components as you mentioned, IndiaBulls is charging only processing fee of Rs.5000+Tax, which is very cheap compared to other two institutes.
Interest is same 9.55% in all. WHat else should I check or better opt for IndiaBulls?
You should check
(a) Interest rate offered is not under some special scheme or limited period offer
(b) What is the discount on BPLR/RPLR?
(c) Any other charges..Normally some charges are demanded after the loan application is submitted like legal charges, valuation fees etc.
1. It is subjective but seems too high. Deposit depend on approved load and BWSSB is applicable only if you are getting individual water connection.
2. Stamp duty is 5.6% in urban areas and 5.65% in rural areas + 1% registration charges
3. I will not suggest…Builder will increase base rate near completion. You should check fair valuation of the project and accordingly negotiate with the builder.
sir, in home loan there are three major expenses. 1. MODT, 2. GENERAL INSURANCE, 3. PROCESSING FEE. YOU HAVE NOT MENTIONED GENERAL INSURANCE. WHY?
General insurance is not a charge as you can avail from insurance provider of your choice i.e. it is not mandatory to pay the same to home loan provider bank.
sir, i asked for a home loan at SBI, Trichy. They say for any home loan property’s General Insurance for the value of the property- not for the loan amount- is compulsory and mandatory. As per your guidance property insurance is optional.Kindly clarify.
Yes it is mandatory and mentioned in home loan agreement also. You can avail from any insurance provider of your choice. It will only cost few thousand rupees.
Hi Nitin, A very informative blog indeed. I have one question for home loan. Axis bank is giving me base interest rate for home loan and there are not MODT charges. They are only charging 5000/+tax as processing fees. They claim that since the property i am buying is pre-approved and belong to a reputed builder and I am working in a reputed firm with no liability you can be given such deal. Please help if this is possible. SBI on other hand is taking MOD and giving 9.55%
MODT is at the discretion of the bank. I will prefer that a borrower should execute MODT.
Hello Nitin,
The construction in my flat is in the final stage (95% complete), some finishing work is pending. I have availed Home Loan from Andhra Bank. They have charged me Rs 3000 for the Final Inspection charges now. What is this Inspection called, Do all Banks do it and is this legal ?
Thank you.
It depends on the bank policy. Inspection charges depend on the loan value. It seems Andhra Bank has charged higher amount. Normally, banks charge Rs 500 per visit subject to max Rs 3,000 p.a. i.e. they will/can inspect 6 times during the year. In your case, they only inspected once but charged for whole year. It is my anticipation only. Inspection charge of Rs 3,000 for one visit is impossible. You may check your home loan agreement for more details.
Thank you Nitin. Appreciate your Fast Reply.
New Home Construction Loans
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Construction loans typically fund the construction of custom or semi-custom homes from the ground up. When buying either a“Spec” home that already is built or when buying new homesfrom production builders, a buyer usually would not use a construction loan. In these transactions, if the builder is selling a completed home the borrower should only need a purchase money mortgage to buy the new home and the land on which it sits. feel free to call 9008133998 / 9964563600.
I have a basic doubt regarding amount of money that the bank calculates the loan amount on. Is Service tax/ sales tax/VAT included while determining total cost of the home loan? Most of the banks mention that stamp duty and registration cost are not used for computation of the amount that will be calculated for home loan.
Except for stamp duty and registration charges, rest all costs are considered for home loan eligibility.
Hello Nitin,
I received an sms saying the bank(from which emi amount was to be debited through ecs) declined payment towards the home loan emi. So how many days do i have till the late payment charges are applied? Their online portal has an option of paying the emi through netbanking. Should i pay immediately and then pursue the matter of the ecs being declined?
You can pay EMI through netbanking and request bank, not to process ECS again for this month. Also submit written complain/application seeking clarification on ECS bounce i.e. what went wrong.
Thank you.
Hi Nitin,
I’m planning to buy a ready to move in property which has been allocated to one person but the registration has not happened yet. Hence I would be performing the 1st hand registration. The owner had availed a loan for this property from Axis bank. I was looking at SBI for the loan, but the process is extremely hectic. Everytime the DSA comes up with some new/additional documents and the filing of the loan application is now delayed by more than 2 week, GOD knows when the loan would be disbursed.
The owner recommended me to go ahead with Axis bank since in this case, it would be an internal transfer of the loan and can be disbursed in 4-5 working days. Also Axis bank matched the rate of interest with that of SBI.
In case of SBI, there is no processing fee, but legal charges of 5,500/- would be reqd. In case of Axis, there is some processing fee of Rs. 2,500/- involved, but no legal charges.
Could you please advise if it is worth going ahead with Axis bank, or is it better to wait for SBI.
As you have correctly mentioned in your blog, the reason for chosing SBI is common perception and trust factor. With private banks heard there are many hidden charges and bank people harass a lot in case of a default.
Kindly advise.
Please check my following post. I have addressed all the points mentioned by you
https://www.nitinbhatia.in/home-loan/housing-loan/
I will still prefer SBI.
Hi, I already purchased new house during march 2015 through housing loan in chennai, at that time i paid only for registration charges (No Mod registration). Now again i am going for loan through flood scheme against property. Now bankers asking to do for Mod registration and kindly tell me how much % have to register.
Normally MOD is required but as now you are going for special scheme under flood relief, in my opinion MOD is must. It is beneficial for borrower. The % can be shared by the bank. Typically it is 0.1% or 0.2% of Home Loan amount.
Hello Nitin,
At the time of loan processing, the builder suggested to make it a round figure loan amount (so there was excess of 15000 in the loan sanctioned amount). Now, at the end of release to builder, the builder and bank manager are asking me to release the 15000 to the builder account and then builder will transfer the 15000 to my account. But, he is not giving me any written confirmation of the same. Even the Bank Manager is saying that this excess of 15000 cannot be transferred to my Savings account (with the same bank) but has to be mandatorily transferred to the builder account. Please suggest on what I should do here.
Thank you very much for your time.
You should not demand the disbursement of this amount i.e. Rs 15,000. It is not mandatory to disburse 100% of approved loan amount. Also submit written application with bank that you don’t need disbursement of Rs 15,000 therefore your loan amount will be reduced.
Hi Nitin,
I have taken a home loan from Bank of Baroda 2 years back and due to some financial crisis reasons, I could not pay EMIs for about 3 months which caused my account turned into NPA. Now, I am being forced by the Bank Manager to pay more than I am supposed to pay. How may I get the over due amount break ups from the branch manager? And how I can complain about his such behaviour with the bank’s customers like me? Who should I contact and get the actual details so that I can pay off my overdues and get relieved from this situation? I tried contacting the customer care but I was advised to contact the base branch, but the base branch manager is not helping and cooperating me to fix the issue. Please help me…
You may approach grievance redressal cell of the bank. You can also take help of RTI.
sir I take home loan from sbi. complete registry process. is there necessary to mortgage of registry. how much charges and how much time to mortgage after registry.
You have not mentioned your state as rules vary in some states like Maharashtra. I am assuming you are referring to MODT. The charges are 0.1% to 0.2% of home loan amount.
Hi Nitin,
Just wanted to have a clarity on whether MOTD is Gujarat is mandatory or not ?
It is not mandatory but advisable to execute the same.
Hi Sir
I am taking a HDFC home loan and my representative says that he is waiving off the processing charges + Legal fee + Valuation charges. However he asked me to pay a cheque of Rs. 10000 + S.Tax towards that and told me that they will automatically reduce it from my first EMI. I am a little doubtful regarding that (at the end of the loan they may show it as outstanding). Is this a general practice sir?
He is misleading you.
thanks sir.
Dear sir,
I would like to take hdfc home loan. They need original title deed. Before submit. Can I take a copy of notary attestation? For panchayath registration they need original title deed? I hope a positive reply from you
You can retain a photocopy and submit original. Take ack from HDFC that original title deed is deposited with HDFC.
Hello Sir,
I have applied for home loan from DHFL bank…i have already done registration of my house..currently service tax and mVAT is remaining…i got reply from DHFL that my loan is sanctioned..but they are asking to pay 5% of the loan amount as franking/registration charges…i am bit confused..apart from processing fee and other cost…why this 5% of loan amount…please advice..also, what is the actual franking/registration charges on the loan amount in MUMbai
You may clarify from DHFL. As i understand, they might be referring that registration charges will be borne by you from your pocket.
Hello Sir,
I planned to buy new home in hyderabad, Builder suggested LICHFL ,then i met LICHFL employee
he told me that the following charges will be collected (I want 25 lakhs loan)
1. Processing Fee – 10000+ST
2.Cerai charges — 500+ST
3.Documentation charges – 5000
4.MODT 0.05% on loan amount nearly 12500
Above said charges are applicable in Hyderabad?
Please let me know.
The charges seems to be ok except documentation charges of Rs 5000. You may clarify what are these documentation charges. Also MODT is 0.5% instead of 0.05% as you mentioned.
Thank u.
I need small clarification…Which is better option to take home loan from Banks or HFL?
Reply.
Banks. Please check my posts on home loan.
Dear Sir,
I am taking a home loan for 60 lakhs. I have decided on SBI. I am mortgaging my property. But SBI is caiming that I need to get i) Property insurance for property and ii) Life insurance for 60 lakhs in my name.
Is it mandatory sir?
Only property insurance is mandatory. Life insurance is not mandatory. Still if they insist then rather availing Home Loan protection plan from SBI, You can buy independent online term insurance plan of 60L and submit a copy of policy with SBI.
thanks sir.
Hi Nitin,
I’m buying a property in Hyderabad, the purchase value of property is 45 lakhs. The developer of the property, have given me two sets of documents 1) Agreement of sale for 22.80 Lakhs ( Market value as per the registrar in Hyd) 2) Work order for the balance amount showing other works will be carried out in the flat (like flooring, POP doors, etc). I will be paying stamp duty on 22.80 lakhs. Is this legally fine ? Will be in any sort of trouble tomorrow because of stamp duty being paid on 22.80 and not on Rs 45 lakhs. Please help.
You may need to pay VAT and service tax on work order. You also need to check the Govt value of property. As i have not seen documents therefore cannot comment on any future hassle.
Hello Sir, I have applied home loan from IOB. They are charging for valuation as well as estimation. I never heard of estimation before. As far as I know there is no estimation in house loans, only valuation. They are charging for both. Could you please help me with this? I want to know if they are looting by doing something which are not required.
Thanks,
Sabyasachi
You should clarify what all they will do under estimation. It is always advisable to avail home loan from leaders like SBI or ICICI Bank to avoid unpleasant experiences.