Got a Home Loan? Here Are 6 Brutal Truths Your Bank Will Never Tell You

A simple, practical guide every borrower must read before signing that dotted line)

You’ve found your dream home. You’ve gone through the tiring process of documentation, verification, and negotiation. Finally, your bank approves your home loan. You breathe a sigh of relief — but wait. The story doesn’t end there.

Most homebuyers assume that once their loan is sanctioned, they’re in the clear. Unfortunately, that’s rarely the case. As Sujit Bangar, founder of TaxBuddy.com, points out, borrowers often discover “surprise” costs, unnecessary add-ons, and half-truths after they’ve signed on the dotted line.

In a detailed LinkedIn post, Bangar shared six important truths that banks and relationship managers (RMs) often skip — intentionally or otherwise. These are insights that could save you lakhs of rupees and a lot of stress.

Let’s break down each truth in simple, easy-to-understand terms.

Got a Home Loan? Here Are 6 Brutal Truths Your Bank Will Never Tell You — But Should

1. Demand a Full Cost Breakup — It’s Your Right

Banks are supposed to be transparent, but in reality, they rarely show you the complete picture of what you’re paying for.

When you apply for a home loan, the bank quotes an attractive interest rate. But soon after approval, you may notice a few “surprise” deductions:

Processing fee
Legal verification fee
Technical or valuation charges
Administrative or documentation costs

Often, these charges are revealed after the loan sanction letter arrives — when it’s too late to negotiate or switch lenders easily.

👉 The rule:
According to the Reserve Bank of India (RBI), you have the right to ask your bank for a detailed cost sheet before you accept the offer.

👉 Why it matters:
Even small hidden fees — say ₹5,000 here or ₹10,000 there — can add up to tens of thousands of rupees.

👉 What to do:
Before signing any loan agreement, demand a written breakup of all costs, including those that are “payable later.” Don’t rely on verbal assurances from your RM. If they hesitate, that’s your red flag.

2. Don’t Fall for “Compulsory” Long-Term Insurance Schemes

Just when you’re about to get your disbursement, your RM might call and say:

“Sir, you must take our insurance policy to protect your home loan — it’s mandatory.”

This is one of the most common pressure tactics used by banks. They often pitch expensive life insurance policies bundled with your loan. These are usually single-premium or long-term plans that cost a fortune — and are conveniently financed by adding the premium to your loan amount.

The truth:

It’s not mandatory to buy insurance from the bank or its partner company. You are free to buy life insurance from any insurer of your choice — or skip it entirely if you already have adequate coverage.

The tax myth:

RMs often pitch these policies as “great for tax saving.” But Bangar points out that most borrowers already exhaust their Section 80C limit (₹1.5 lakh) with the home loan principal repayment itself.

Moreover, with many taxpayers shifting to the new tax regime, these deductions don’t even apply anymore.

Smart tip:

Apply to 2–3 banks simultaneously. This gives you bargaining power and prevents any single RM from trapping you with last-minute add-ons.

3. Use Joint Ownership to Double Your Tax Benefits

This is one of the most powerful — and perfectly legal — strategies for homebuyers.

If you’re buying property with your spouse or a family member, register the property jointly and take a joint home loan.

Here’s why:

Under Section 80C, each co-owner can claim up to ₹1.5 lakh deduction on principal repayment.
Under Section 24, each co-owner can claim up to ₹2 lakh deduction on home loan interest.

That’s ₹3.5 lakh per person — or ₹7 lakh in total for two co-owners.

However, to claim these benefits, both names must appear on:

The property documents, and
The loan documents (as co-borrowers).

👉 Example:
If you and your spouse jointly buy a ₹60 lakh flat and pay ₹5 lakh in interest and ₹3 lakh in principal each year, both of you can claim deductions separately — doubling your total tax savings.

Smart tip:

Even if one person earns significantly more, joint ownership is still beneficial in the long run — especially if both partners may earn or file taxes independently in future years.

4. Register the Property in a Woman’s Name to Save on Stamp Duty

Here’s a little-known but extremely useful hack.

Many states in India — including Delhi, Haryana, Punjab, Rajasthan, and Uttar Pradesh — offer lower stamp duty rates if the property is registered in a woman’s name.

The difference is often 1–2% of the property’s value.

👉 Example:
For a ₹1 crore property:

Stamp duty for men might be 7%.
For women, it could be 5%.
That’s a ₹2 lakh saving — instantly.

The fine print:

If you choose to register the property solely in a woman’s name (say your wife or mother), remember that the ownership and succession rights will also rest with her. Make sure this is discussed and documented within the family to avoid disputes later.

Alternatively, you can add her as a co-owner — enjoying both stamp duty concessions and shared tax benefits.

5. Always Verify the Project on the RERA Portal

Buying property — especially under construction — is risky business.

Before you pay even a single rupee, check if the project is registered under your state’s RERA (Real Estate Regulatory Authority).

Why RERA matters:

The RERA portal gives you complete transparency about:

The builder’s name and track record
Project completion timeline
Pending approvals and litigations
Whether the land title is clear
Whether the project has faced past complaints

How to check:

Go to your state’s RERA website (for example, maharera.mahaonline.gov.in for Maharashtra).
Search by project name, builder name, or RERA registration number.
Review the details carefully.

If the project is not listed, that’s a red flag.

Bangar’s advice:

“Skipping this step can cost you heavily. RERA registration is not a formality — it’s your legal safeguard.”

Smart tip:

Even after purchase, keep checking the RERA portal for updates on your builder’s progress and any new complaints from other buyers.

6. Never Take Possession Without an Occupancy Certificate (OC)

You’ve waited months — maybe years — for your dream home to be ready. The builder calls and says, “Congratulations! You can collect your keys.”

Tempting as it is to move in immediately, pause and ask one crucial question:

“Has the building received the Occupancy Certificate (OC)?”

What is an OC?

An Occupancy Certificate is a document issued by the local municipal authority stating that the building has been constructed according to approved plans and is safe to live in.

Without it, your home is technically illegal to occupy.

The risks of skipping OC:

You may face penalties or eviction notices from local authorities.
You won’t be able to apply for utilities like electricity or water legally.
Selling or renting the property later becomes extremely difficult.

What to do if your builder delays the OC:

Do not take possession until it’s issued.
Escalate the matter via RERA — the authority can direct the builder to comply.
Document all communication with the builder for legal safety.

Bangar’s warning is clear:

“No OC? No keys.”

The Fine Print: Why Banks Stay Silent

Now you might wonder — if all this is so important, why don’t banks or RMs tell you upfront?

The reality is, banks and their staff are under constant pressure to meet sales targets. The more products they sell — loans, insurance, credit cards — the higher their incentives.

So, while they may not lie to you, they often omit inconvenient truths that could affect their commissions or delay your loan process.

Common pressure tactics include:

“This insurance is mandatory, sir.”
“We can only process your file if you agree to this policy.”
“This is a one-time charge; everyone pays it.”
“Don’t worry, we’ll refund it later.”

Always remember: You are the customer. You have rights. The RBI’s Fair Practices Code requires banks to disclose all charges, offer clarity, and avoid misleading sales practices.

If you ever feel misled, you can complain to the bank’s grievance redressal officer or file a complaint with the RBI Ombudsman.

Bonus Tips for Smarter Borrowers

Besides the six truths above, here are a few more ways to make your home loan journey smoother:

Compare effective interest rates, not just the headline rate.
- Check for daily vs. monthly reducing balance.
- Small differences can change your total cost significantly.
Avoid over-borrowing.
- Just because the bank is willing to lend ₹80 lakh doesn’t mean you should take it.
- Borrow only what you comfortably repay, even if interest rates rise.
Maintain a good credit score (750+).
- It can save you up to 0.5% in interest — that’s lakhs over the loan term.
Review your loan every 2–3 years.
- Refinance to another bank if you find a significantly lower rate.
Prepay smartly.
- Even one extra EMI per year can shorten your tenure by years and save massive interest.

Conclusion: Be Your Own Financial Watchdog

Buying a home is one of life’s biggest milestones — and often, the biggest financial commitment you’ll ever make. Banks and builders play their part, but ultimately, you are the one responsible for protecting your interests.

Sujit Bangar’s six “brutal truths” serve as a reminder that financial awareness is your best defense. Don’t let jargon, pressure, or partial truths cloud your judgment.

So before you celebrate that home loan approval, take a moment to ask the right questions, demand transparency, and stand your ground.

Because when it comes to home loans, what you don’t know can cost you — dearly.

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