4
12. Is it mandatory to buy insurance with a home loan?
No, it is not mandatory to buy insurance with a home loan. But sometimes insurance
is one of the conditions for loan sanction. In such cases, a housing finance company
cannot force you to buy an insurance product from a particular company. You have
the option to choose the insurance product that is best suitable for you.
13. List of HFCs which can take possession of the property under the provisions
of Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002, in case of defaults in repayment of loans?
There are 60 HFCs (as in January 2018) notified as ‘Financial Institution’ under sub-
clause (iv) of clause (m) of sub-section (1) of Section 2 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, by
the Government of India, Ministry of Finance, Department of Financial Services.
The list of SARFAESI notified HFCs is available at http://egazette.nic.in.
In addition, HUDCO is also covered under the above provisions, since it is notified
public financial institution.
14. What are the various fees collected by HFCs?
A home loan often requires payment of various fees, such as –
i. Loan origination or processing charges;
ii. Administrative charges;
iii. Documentation;
iv. Technical inspection fee;
v. Late payment;
vi. Changing the loan tenure;
vii. Switching to different loan package during the loan tenure;
viii. Restructuring of loan;
ix. Changing from fixed to floating interest rate loan and vice versa;
x. Legal fee;
xi. Recurring annual service fee;
xii. Document retrieval charges; and
xiii. Most importantly, pre-payment charges, if you want to prepay the loan. Every
lender should be able to give you an estimate of its fees. Many of these fees are
negotiable / can be waived also.
Sometimes several components are lumped into one fee.