Other costs that usually accompany a home loan or mortgage
Home loans and mortgages are usually accompanied by:
a) This fee is payable to the lender of the loan amount when applying for the loan. The processing fee can be a fixed amount that is not linked to the loan amount or a fixed percentage of the loan amount, fixed by the lending institution. The ruling condition is that the loan amount sought cannot be less than the processing fee under any circumstances.
The pre-payment penalty is applicable when the loan amount is paid back before the expiry of the initially agreed upon loan duration. This penalty is charged at the rate of 1% and 2% of the amount that is being pre-paid.
There are quite a few lending institutions that levy a commitment fee in case the loan amount is not claimed from them within a stipulated period of time, after it is processed and sanctioned. This reduces their risk of losing the customer and increases yours, as the customer.