Hidden Costs that you Should Know About Before Buying a Home
When you’re on the market to buy a new home, you’ll generally be watching out for a lot of things before you make a decision. One of the major things you would generally be watching out is the Home Loan and all the details surrounding it.
So, what costs should you be aware of before you step foot into a bank to apply for Home Loan?
Parking Space, If you Need it
Builders don’t mention the cost of a parking space when they give you a cost for the house you want to buy. If you want to have a parking space, then you should be ready to shell out extra. This will go doubly so if you want a cov ered parking space.
This is mainly because builders will only give you the basic price of the home you’re buying and the land that it occupies. The parking space is entirely different, so they’ll avoid mentioning that just to show a lower price so as to entice customers.
If you need a parking space, be sure to ask the builder about it and what the cost of the space will be.
Registration Fee is another
This is something that is mandatory, but you’ll rarely see any builder including it in their cost for the house. Registration fee or stamp duty is something that you are required to pay to the government by law.
Typically, this comes up to 1% of the cost of the house for the registration. For stamp duty, that’s another 7%. As you can see, that’s a pretty substantial amount, seeing as homes are rather expensive themselves.
Home Inspection is Something your Bank will do
This is a cost that comes along with Home Loan charges. Before the bank approves your loan, they’ll want to perform an inspection of the property that you want to buy. They want to know how much the land is actually worth, and what are the clearly defined boundaries.
This inspection isn’t done free. The bank will be adding this to your Home Loan charges. Make sure you know how much they’re charging you, otherwise it’ll be a nasty surprise when it does happen.
Banks will either charge this as a straight payment, or add it into the monthly payments that you’ll be making to pay off the loan.
You’ll also be Charged for the Floor Rise
Commonly known as floor rise charges, it also has another name, Preferential Locality Charges. Most builders incorporate this into their cost. If you want a home on a higher floor, then be prepared to shell out extra.
Things like this might not seem obvious at first, but you will have to make sure that you can anticipate all of this.
Banks will also take this as another Home Loan criteria to be met before they approve and sanction your loan application.
Good Old VAT Applies as well
VAT is another expense that you’ll have to consider. Depending on the state you’re in, VAT will be charged accordingly.
Although a few percent of VAT might not seem like much, it can be a substantial amount when your home is valued very highly.
Do a check beforehand of how much you can expect to pay as VAT. If you have any questions or clarifications, you can approach your bank to help solve it.
From applying for a Home Loan to paying it off successfully, it can be quite an arduous process. If you want to know whether or not you qualify for a Home Loan, you can also calculate Home Loan eligibility based on the information you have about yourself.
Go online and search for Home Loan calculators. They can offer everything from how much you can qualify for, to how long your loan tenure would last to pay it off.