Home Loan for the First-time Buyer

Home Loan for the First-time Buyer

Everyone aspires to own a home of their own one day, but the large financial commitment involved can sometimes become a hindrance. This is when home loans come into play; you can avail of home loans from banks to complete the payment for your home and repay the sum back over a period of time using equated monthly instalments (EMIs).

For the first-time homebuyer, taking a hefty home loan might appear a tad daunting, so here’s a breakdown of what a home loan entails:

Eligibility Criteria

Most banks and NBFCs require a borrower to be between the age of 18-60 years and earning a minimum income stipulated by the bank. You can be salaried or self-employed but should have a steady income. For this, you might need to furnish them with salary slips of the past six months.


Banks never provide the entire cost of your home. You have to dish out around 20% of the cost while the bank provides the remaining 80% as a loan. This means you need to be careful when house-hunting as the total cost should fall within your budget.

Interest Rates

Different banks offer varying interest rates on their home loans. Even if the difference is .25%, it translates into a big sum when EMIs are computed so you need to shop around with different banks before finalizing with the one offering best rates. You also have a choice of opting for fixed or floating interest rates during the tenure of your loan.

Processing Fees

Banks can charge a non-refundable 0.25-1% of the loan amount as processing fee along with 18% GST. Be prepared for this additional payment.

Documents Required

You will need to furnish solid ID proofs like your PAN card, Aadhar card, driving license, residence proof and photograph along with a duly-filled application. A check for the processing fee and previous 6 months bank statements are also mandatory.


While a longer home loan tenure might lead to a minor drop in the EMIs, the borrower ends-up doling out a substantially larger amount as interests paid. The shorter the tenure of the home loan, the less the interests paid. A difference in five years of additional tenure can cost you around 10lakhs more as interests paid out!


Finally, choose a home that falls within the jurisdiction of your loaner bank.

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