Home Loan Hidden Charges Banks Don’t Tell

1
Home Loan Hidden Charges Banks Dont Tell
2

• 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 loans hidden charges as banks keep moulding
  the definitions as per their convenience. Lets go
  though each of these Home Loan hidden charges

3
Home Loan
4
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 _at_ 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 _at_
  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.

5
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
  sameCharges vary from state to state but is
  normally 0.1 to 0.2 of Home Loans amount. It is
  one of the most imp Home Loan hidden charges

6
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.

7
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

8
Source http//www.nitinbhatia.in/home-loan/15-hom
e-loan-hidden-charges-banks-dont-tell/
http//www.facebook.com/idbibank
https//plus.google.com/IDBIBank
https//in.linkedin.com/company/idbi-bank
http//www.twitter.com/idbi_bank
http//www.youtube.com/idbibank

• Thank You!