Fees & Charges of Home Loan
When you think about getting a home loan what do you usually consider? Chances are you think about the total amount of the loan you’re going to get. You think about what the monthly payments are going to be on that loan. The thing is there are an assortment of other fees and charges that you can end up paying that can drastically increase how much a loan is going to cost you.
Now a lot of these fees are ones you’ll know about in the beginning. For instance there’s a processing fee with putting in an application. Are there instances where this fee can be waived, yes, but a lot of banks will charge a fee due to the complex nature of looking over an application and verifying all information on it is correct.
You have to look at various professional fees as well government based charges. The professional fees have to do with all of the professionals involved in the application process and those you’ll be dealing with as long as you’re under a housing loan with a bank. For example, if you’re late paying your loan in a given month, then you’ll have to pay a late fee to the bank. If you’re late with this then there might be additional penalties.
Late fees can add up pretty quickly if you’re not careful, but these are just one of the fees and charges you need to be concerned about. Let’s say in the case of you taking out a certain housing loan such as a semi-flexi. If you decide you want to make an advanced payment and after this you need to take out some money, then there’s going to be a charge for this. There certain charges that can build up the longer they’re not paid as well.
There are fees and financial penalties that come with paying off a housing loan too soon, particularly if you didn’t get the type of loan that enables this without question such as a full-flexi loan. Conventional loans usually don’t offer much flexibility in this regard, especially if they are long term fixed rate.
When it comes to the government fees you’ll have to pay these will come in the form of certain taxes, fees or penalties you’d have to pay for owning a property. Some of these fees you pay before you even get a housing loan, but depending on the particular fee it won’t be a one-time thing.
What you might want to focus on are the most common fees associated with getting a housing loan. These are the types of fees you can expect to pay no matter what.
- Stamp duty fees
- Sales and purchase agreement fees which are usually (0.5% to 1.0%)
- Loan agreement fees, which are usually around 0.5%.
- Transfer and title fees, which can be around (1.0% to 2.0%).
- Various disbursement fees. These are fees that are going to be different based on where you are, the land office and the specific type of property you have.
The different fees and charges associated with a housing loan whether they be on the front end or back end need to be carefully considered. These fees when combined can add up to a nice portion and impact your ability to make the actual monthly payment. This shouldn’t be the case most of the time though, especially if you’ve done your homework. Also, depending on what type of fees you’re paying (such as mortgage protection for example) then these might actually be built into your monthly payment to begin with.