When you borrow funds against a collateralized property, mortgage loan interest rate is the primary charge you need to pay on it. Other than interest, there are a few other charges which a borrower has to pay on availing a mortgage loan.
These include the following -
- Processing fees - These can also be called application fees. They cover administration costs, credit checking expenses, property appraisals, etc.
- Security fee - You might ask what is mortgage loan fee charged to ensure the security of your loan account, personal information, transaction history. The answer to that would be a security fee. It is charged by the lender to keep your data safe.
- EMI bounce charges - This fee is charged if and when the EMI cheque of a borrower gets bounced due to insufficient funds or other issues.
- Part prepayment charges - If you wish to prepay a loan, you will have to bear this charge.
- Penal Interest - The lender charges penal interest when a borrower defaults his/her EMI payments.
- Statement charges - It covers the printing and sending expenses of loan account statements to a borrower.
- Foreclosure charges - You need to pay this charge if you wish to close the loan earlier than discussed.
Now, your LAP loan lender might levy all of these charges or offer exemptions. The charges are likely to vary from lender to lender as well.
So, while discussing the property loan interest rate with your lender, you must not skip enquiring about these additional charges.
Nonetheless, interest outgo is the primary factor you should be concerned about while availing a loan against property. Also, to get a better idea of how affordable the mortgage loan interest rate of a particular lender is, you can use a LAP or loan against property calculator.
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