Latest Answer: Over the last 2 years there has not been much of a difference between a public sector and a private sector when it come to a Housing Loan. One of the main complaints against private banks has been that it is more expensive but currently the Rate of Interest at both Public and Private banks are the same. ( Except for SBI which is 0.10% cheaper)
When it comes to ease and speed of processing Private banks are much better and also they have a much better customer support unit which may be lacking in most public sectors banks as of now.
The RBI has also made it clear that the banks cannot charge any foreclosure or pre-closure charges which has ensured that there are no hidden charges which can be passed on to the customer.
I would definitely suggest a HDFC or a ICICI bank to address your home loan requirement today than a Public sector bank taking into consideration that the rates being the same I am getting a much better service and facilities.
Latest Answer: Home loan application to a bank attracts the following charges.
Processing Fee: Unlike all other loans Home Loan processing fee is paid along with the application for Home Loan. This is because the bank spends the fee in getting the Legal and Valuation done on the property that you are proposing to purchase and hence the money is charged upfront. The PF varies from bank to bank and may be a flat fee or a Percentage of the loan amount. Most banks like ICICI/HDFC/Axis charge a flat fee of 10K plus service tax for all salaried customers regardless of the loan amount and charge 0.5% of the loan amount as PF for Self Employed customers. So you have to check as to what is the PF that has to be paid upfront.
Franking Charges: the Loan agreement that you sign with the bank has to be franked for anywhere between 200Rs to 900Rs max, sometimes it needs to be notorised as well and that will cost you a extra Rs 200. But in total this charge cannot be more than a 1000Rs in total, some banks will get you to sign a pre franked agreement and some will charge you for the franking so its better to account for a rough 500Rs to 100Rs on franking of the loan agreement
MOD charges: Almost all Indian banks charge 0.1% of the loan amount as MOD charges, this is either deducted out of your loan amount or you may have to buy a E Stamp paper for an equivalent amount and submit it to the bank
CERSAI charges: Banks charge you 500Rs plus Service tax as CERSAI charges as well.
Beyond this Ideally there should not be any other charges at the time of taking a home loan.
Latest Answer: 4) Not getting the important documents upfront
Home loan documents are important set of papers that require special attention. Borrowers often fail to arrange them properly and misplace them or lose them with any financial institution. In addition to it, borrowers often forget to request for a list of the documents submitted to a financial institution, after the loan processing process is completed. This takes a toll on the individual’s credibility and makes it difficult for him/her to apply for any other loan in future.
Q:How the increased repo rates are going to affect the real estate market? Although the finance expert were telling that the Repo rates will remain stagnant but however the Repo rates have been increased by 0.25 percent.
Latest Answer: According to an expert, other way of repayment could be that the co-borrowers share the number of EMIs between them such that a specific number of cheques can be issued by one borrower and the balance by the other