Unique Features of Housing Loan
The interest rates and EMI's are not the only cost factor. A 1% administration fee and a 1% processing fee on a Rs.10 lac loan, would amount to Rs.20,000/-.
Processing fees, administration fees, valuation fee, legal fee, is to be paid when you apply for a loan and other fees paid at closing. Many of these fees are negotiable. You should ask for zero processing fees and zero-penalty for pre-payment option. If this were not available, then lowest cost would be better.
Make sure you work out as to how much these other costs add up to. So even though the interest rate may be lower, it usually adds up to being expensive. If the EMI's may come out a lot more than what you can afford on a monthly basis; try to redo the math with changes in the tenure and loan amount (if possible).
So make sure you always ask for a letter on the banks letterhead mentioning the likes of, exact rate of interest, processing fees, pre-payment charges along with interest-schedule.
Before signing the documents, make sure you recheck all terms and conditions.
Do make sure you understand and agree with each of the clauses in the documents. Do not sign any blank documents. Even if it takes you a few hours to fill-up the form, please do so.
Do not leave anything for the executive to fill-up. It's always better to get a legal opinion from someone on your loan papers.
Penalties once you have received the loan do your best to pay it back as quickly as possible. But this early payment might invite a pre-payment clause.
Banks make their money off the interest they charge and the sooner you pay back a loan the less money you will have to pay in interest. When it comes to Home loans, penalties are binding, like if you chose to pay up your entire money before the tenure, a Pre-payment penalty is charged. So you should know about such penalties beforehand to avoid future misunderstanding between you and the bank.
For further information on Home Loans - Please email us on firstname.lastname@example.org and we shall understand your needs, analyze, study and recommend you the best possible options. We do not charge you for this service provided the property is bought through our assistance.