Buying a house is indeed an achievement to be proud of. However, with the current property prices, it becomes difficult for people to buy houses. This is why it is very common for people to apply for home loan plans so that they can afford to buy their dream homes. 

Now, there are a lot of factors to keep in mind before taking a home loan. There are many borrowers who have faced repayment problems, all because they did not focus on getting the right plan for themselves. This ultimately has a negative impact on their credit records. To avoid all these problems, here are some aspects that need to be focused on:

• LTV percentage 

LTV (Loan to Value) is a certain percentage of the property price that the lender agrees to finance via their home loan. Usually, a lender can finance up to 90% of the value of the property if the value of the house you are buying is in the range of Rs 30 to 70 lakh. For houses that are priced above Rs 75 lakh, a lender can finance up to 80% of the property value. The rest of the amount will have to be covered from your pocket as the down payment. 

• Home loan interest rate 

The interest rates on home loans offered by various financial institutions can vary. The home loan interest rate is one of the biggest factors that has a significant impact on the repayment of the loan. This is why borrowers place a lot of importance on getting a good rate on their housing loans. Also, you can either choose to go for a floating or fixed interest rate. The former changes as per market conditions and the latter will remain unchanged and will be slightly higher than the floating rate. 

• Credit score 

No matter what type of loan they are applying for, a lender is always going to take a look at the applicant’s credit record. This is why it is so important to maintain a good credit score. Maintaining a score of 750 or more can bring a host of benefits, such as being offered a bigger home loan amount, a lower interest rate, and even a flexible repayment tenure. 

• Affordability 

This is something that you need to think about, before applying for a loan. You need to be sure of repaying the loan without any defaults. For this, it is better to make use of a home loan EMI calculator that will help you understand the monthly instalments of the loan. This way, you will know whether the loan plan being offered is affordable or not. 

These things need to be kept in mind before applying for a home loan. Also, make sure to check with the lender regarding home loan eligibility criteria and documents required for home loan. Each lender may follow their own protocol, and it would help to be familiar with it before kick-starting the whole process of getting a loan.