The excitement of purchasing your own home is like no other. While taking a home loan to fulfil this dream is a big part of the financial planning, there’s more to consider when buying a home. Your financial obligation isn’t limited to a down payment, as you have to pay several other charges too. Being aware of them in advance will give you ample time to plan for the extra cost. Here are the hidden costs that you shouldn’t forget to account for when purchasing a home.
1. Registration and stamp duty
It is easy to forget about the registration and stamp duty charges while budgeting for home purchase. If you want to know how much this can cost you, work on the assumption that the amount will be around 5% of the property’s value. You might also have to pay a lawyer’s fee, which will amount to 1%-2% of the property’s value, to carry out the registration and stamp duty paperwork and formalities.
2. Parking and advance annual maintenance charges
In order to own a parking space for your vehicle, you will have to pay an amount in addition to the cost of your home. This amount will increase if you have multiple cars. Depending on where you buy your home, the price for a parking space ranges from Rs.1 lakh to Rs.5 lakh. Along with this you will also have to pay for maintenance of the building and/or society, as per the terms and conditions laid before you.
Additional Read: The 10-Point Checklist For Selling Your Home
3. Brokerage fees
If you have purchased a home by enlisting a broker’s services, don’t forget to factor in his or her fee. While most brokers will ask for 1%–2% of property value as fees, others may charge even more. It is best to get this information before you begin your home search.
4. Processing fees on your home loan
In order to process your home loan application, you will need to pay a processing fee. This fee covers basic administration costs and include costs incurred by the lender to carry out credit checks, document verification, etc. While selecting a lender for a home loan it is essential to look for one that has a lower processing fee like Bajaj Finserv. Besides, their Home Loan comes with value-added services such as property search and property dossier services, flexible tenor, Flexi Loan facility and online loan application.
5. Extra charge for location preferences
You should also keep in mind that a prized location comes with an extra charge. So, if you have a lake-facing home or a home with a terrace garden, for example, you might have to shell out an additional sum for this exclusive advantage.
You will have to pay GST if your property is under construction and you have bought it after this tax was implemented. On the other hand, if you purchase a ready-to-move-in flat, you won’t have to pay GST on it. While selecting homes for purchase, look for a property where the builder has already obtained the completion certificate. This is considered as a ready-to-move-in flat and doesn’t require you to pay GST.
7. Peripheral expenses
After purchasing a home, the first thing you will want to do is move into it. However, don’t forget to factor in costs such as those of packers and movers and interior decorators. As a thumb rule, get a quote from several service providers before selecting one to ensure that you get the best possible deal.
Understand these hidden costs and factor them in to ensure that your home borrowing experience is smooth and hassle-free.
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