Thumb Rules to consider while buying a house on home Loan


Currently, the interest rates on home loans are absolutely low. And with a good credit profile and a good ability to pay, you can get a home loan at the lowest rates.

But before applying for a home loan, there are a few important things to keep in mind, including:

  • The mortgage loan amount approved for you depends on your eligibility, such as your income, CIBIL score, and current obligations.
  • You need to fix other things like the price of the property you are considering buying.

After all, a home loan needs the longest commitment, as it has to pay EMI for twenty to thirty years. Paying your monthly EMI for a long time can affect your finances, therefore you need to be very careful when taking out a home loan.

A few Thumb rules to help

Determining your budget is one of the basic rules you must follow when buying a home. To do this, you must analyze its affordability and then determine the budget. Doing so prevents future financial problems and keeps finances on the right track

Follow 35/50 Rule

When availing of the home loan, lenders ask about your current and financial obligations, including a list of your current loans, such as personal loans, car loans, etc.

This question is asked because banks generally do not lend an amount where the average monthly income is more than 45-50% of your monthly income. However, it is always advisable to get a home loan where the EMI of the home loan does not exceed 35% of your monthly income, while the total EMI, including all loans, should not exceed 50% of your total monthly income.  Following this will make you feel less burdened and will also allow you to save for other purposes.

Home loan

The credit score is an Important Check

A credit check is also one of the most common things to follow when applying for a home loan. For those who have a good credit score, it is easier to qualify for the loan while for others it becomes difficult. Banks even offer a lower interest rate on home loans to borrowers with high credit scores. This means that having a good credit profile helps you get a better mortgage deal from banks. So why not check this out before applying for a home loan? If you don't have a good CIBIL, wait a few months, get a small personal loan, start paying EMI and after a few months when your CIBIL is good, apply for a home loan.

Opt for a Shorter Tenure

Paying off your home loan for a longer period can lower your EMI. But did you know this way, you end up paying more interest, which can increase the total cost of borrowing. This means that if you choose a longer-term loan to keep EMI low, your overall interest burden will increase. Therefore, to keep interest costs low and have a happy loan, you should choose a shorter term for your home loan.

Do Your Calculations

Not just for a home loan, doing the math and knowing the estimated EMI is a must for any loan, be it a personal loan or a car loan. This is because doing the math not only helps you analyze your affordability but also helps you plan your finances accordingly. Using EMI calculators online is one of the most efficient ways to do this.

Well, this was about the general rules one should follow before buying a home through a mortgage loan. Following this will surely guarantee a happy loan and a financially secure future.

Credit- finance buddha Also read- DTCP issues, over 60 flats, 40 shops built without permission: Gurugram