Miscellaneous costs on home finance and mortgage
A home loan does not only come with the re-payment on the amount of loan. It includes a number of other costs that are applicable and add up to quite a sum. The processing fee for one is a fee that is payable to the lender by the person seeking the loan, on applying for the loan. The fee is supposed to take care of all the processing charges that the lending institution bears for the documentation.
The prepayment penalty is yet another miscellaneous cost borne by the person seeking the loan under the garb of being the fine for paying the loan back before the agreed term of the loan! Most banks and lending institutions charge a penalty for the prepayment of the loan amount and even a commitment fee. The lending institutions aIso charge documentation and consultant charges for guiding the person seeking the loan and helping with the documentation and procuring of relevant documents on behalf of the person.