Outlook Money
Many people cannot afford to buy a home entirely from their savings and therefore rely on home loans. It is important to follow smart strategies to manage loan affordability and repayment effectively.
A down payment of 10 to 20 percent is usually required, along with extra expenses such as stamp duty, registration charges, and furnishing costs.
It is important to use your savings wisely and borrow an amount that you can comfortably repay through monthly EMIs.
You should decide whether you prefer higher EMIs with less upfront payment or lower EMIs by contributing more initially.
Banks generally lend up to four times your annual salary but restrict your total EMIs to 40-45 per cent of your monthly income.
Your credit score and loan eligibility can be raised by paying off existing debts and making EMI payments timely.
Adding a co-applicant or co-borrower combines incomes which improves your FOIR and borrowing capacity.