Home Buying: Before buying a house, do these 4 questions with yourself, from home loan installments, every problem will be solved

Photo:FILE Home Loan


  • Banks give loans from 75 to 90 percent of the total value of the property
  • Make as much down payment as you can.
  • A credit score of 750 or above is better for home loans

First the corona epidemic and now inflation. One new problem after another has taken away the common man’s dream of home. Corona disease has given a big life lesson to the common people. Corona told that life is full of uncertainties. Corona said that the crisis affects collectively. But everyone has to suffer it on his own side.

The Corona crisis has the biggest impact on our long-term investments or expenses. One of these expenses is the house. Whose installments take many years to pay off. Also, a huge amount is required to buy a house. Most of the people take the help of home loan for this. Home loans have a larger amount and longer repayment tenure. It is imperative to prepare before taking on this long-term financial responsibility. In such a situation, we are telling you about 4 such questions, through which you can find out whether you are ready to take a home loan now?

Question 1: Do you have enough money for the down payment?

Banks help you buy a house. But for this you have to raise some money. Nowadays banks give loans from 75 to 90 percent of the total value of the property. But to pay the balance amount, you will have to make the down payment yourself. This is called the LTV ratio. The lower the LTV ratio, the lower the rate of interest. So try to make as much down payment as you can.

Question 2: Do you have a good credit score?

For giving loans, banks and other financial institutions first check the credit score of the person. A credit score of 750 or above is considered better for a home loan. Always pay your credit card bills and loan EMIs on time to improve your score, keep your credit utilization ratio up to 30% and avoid applying for multiple loans or credit cards.

Question 3: Do you have sufficient payment capacity?

Banks show priority in giving loans to those whose monthly liabilities are limited to 50-60 per cent of their monthly income. If your liabilities exceed this limit, the first thing you need to do is to repay the existing loan to reduce your EMI. You can terminate the loan by paying before the stipulated period.

Question 4: Emergency fund for EMI?

A hefty penalty is levied for defaulting home loan EMI payments. This will also have a negative effect on your credit score. Increase your contribution to your emergency fund so that you are able to pay your EMIs for at least six months even if the income decreases.

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