Submitted by: Anamika Verma

Most of the metro cities have high rates of housing for residential purposes. The maintenance of these houses is very high, as compared to rural areas in India. The working class wishing to buy their own house, need to properly plan their finances for such an investment. Buying a house in the city can be confusing and it can be very frustrating for the buyers to negotiate on the budget if they like any property. And with the property prices rising every year, getting hold of a reasonable price for a house can be a difficult task.

The Home Loan can be availed, but to be eligible for that is a task. A lot of things like your credit score, monthly income, and the bank savings are required. On the basis of these, the bank will issue you a Home Loan as per your budget. The financial situation of a person is an important factor that decides the loan amount and the budget for the house. Analyzing your situation and calculating the best budget should be your first move before you approach the bank. The banks will provide you with all types of loan terms, but its you and your financial planners responsibility to make responsible decisions.

Notably, your down payment also affects a loan. Most banks ask a minimum of 20% of the property cost, as a down-payment from you to be paid in liquid form, before they issue the loan. You should first save some money as the initial down payment, because banks may require you to have this amount. This also depends on the cost of the property. Sometimes the bank only asks for 10% of the property cost, if the property cost is within 20 Lakhs.

Once you decided with your budget and you find the suitable property, you should have also saved a minimum of 20% of the propertys cost. Now the next step is to get the loan. The Home Loan will come with easy monthly repayment options, and this will include an annual interest that depends on the bank. The more your down-payment, higher the chances of you getting the loan.

Normally the bank can charge 8.5% to 9% rate of interest p.a. EMIs are a recurring payment taken till your tenure period ends. Tenure period can be 15 years to 20 years depending on the bank, decided at the time of signing the agreement. The government also gives tax deduction on your monthly EMI to the Home Loan account.

Keep in mind that your credit score rates and loan payment history can define whether you are eligible for getting the loan. Any bad debt or not clearing your bills on time can lead you to not get the desired loan as per your budget. Thus it is always advisable for a person to improve their credit report before applying for a loan.

Getting an affordable home can definitely involve some hard work and thorough research. But this effort goes a long way in securing your dream home.

About the Author: Anamika Verma writes on various types of financial loans and has a vast experience as a financial advisor. Her expertise on financial issues is well sought after and she is known for her in-depth knowledge topics such as debt management, liquid assets, mutual funds etc. She has written more than numerous of blogs on topics related to personal loan and home loan eligibility. (

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