Home loan: All you need to know about hidden charges

A home loan helps people in fulfilling their dream of buying their own house. However, many times, people ignore the hidden charges that come with the purchase. People might think that all they have to pay is an EMI. But this is not the case. The hidden charges can make a big difference to one’s actual loan repayment obligation. Anyone who has a regular source of income is eligible to apply for the home loan. There are other eligibility factors like income level, age limits, loan amount requirement etc. which differs from lender to lender. The interest rates on home loans also vary from lender to lender.Here are the hidden charges of a home loan:GST chargesYou don’t need to pay GST on the loan amount directly, but GST is applied to the charges you pay to the banks on the home loan. For instance, if Rs 5,000 is the processing fee, then you are required to pay 18 percent GST on it, which is equal to an additional Rs 900.Loan processing feeBanks levy a loan processing fee for processing one’s loan application. It is a one-time fee based on the percentage of the applied loan amount.Home loan documentation chargesDocumentation charges are levied by banks for getting your documents in safe custody and maintaining such documents in their record.Administrative feeFor record keeping and other administrative costs, an administrative fee is also charged. This also includes the yearly charge to update your home loan records.Memorandum of Deposit of Title Deed (MODT) feeMODT is levied for a mortgage by depositing the property’s title documents with the bank of your own free will in return for a loan. The lender’s share of your property is shown by the MODT until you repay the entire loan. These charges include registration fees and stamp duty. They differ from state to state, ranging between 0.1 to 0.5 percent of the loan amount.Other charges:The home loan may also include some other charges, like property insurance premiums, incidental charges, pre-EMI charges, credit score access charges, etc. The costs depend on the bank. So, check this with your lender before you apply for a loan.Read all the Latest News, Trending News, Cricket News, Bollywood News,India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.