Detailed Home Loan Guide for First-Time Home Buyers in India

Detailed Home Loan Guide for First-Time Home Buyers in India

If you are a first-time homebuyer, the entire process of not just buying a home but also knowing how to get a home loan from a suitable  financial institution can get taxing and complicated. Therefore, you need to be equipped with the knowledge of how to take a home loan in the current Indian market to ensure easy home loan approval and disbursal.

How to Get a Home Loan in India?

  • Prepare a financial plan and determine the budget of your house.
  • Find your dream home based on the budget.
  • Determine the home loan amount you need.
  • Research, compare and find the lending institution of your choice.
  • Submit a duly filled and signed loan application form with relevant documents.
  • Discuss the loan requirement, payment schedule, tenure, and EMI with the bank.
  • Pay any processing fees and other charges.
  • Get the documents valued.
  • The lender will start the verification and approval process
  • The lender will process the Offer Letter.
  • The lender will process the property papers and conduct a legal check.
  • Finally, they will do a technical check and site estimation.
  • The lender will offer the final loan deal.
  • You will sign the agreement.
  • The lender will disburse the loan.

Home Loan Rules and Regulations: Things to Keep in Mind

  • Calculate your home loan amount, eligibility, interest rate, EMI, and tenure:

    You can use a wide range of online calculators to understand your loan amount eligibility and calculate the applicable EMI for a basic home loan. The total EMI outflow should not exceed 60-65% of your total monthly income. The longer the tenure, the higher will be the interest amount. So, opt for the shortest possible tenure with the most suitable EMI amount for your first home finance.

  • Check and research the details of your property for easy home loan approval:

    • The house is registered under the seller’s name.
    • The seller has the complete documentation for the ownership, any house mortgage details, any existing home loan information and the sale of the property.
    • Do not opt for properties with unapproved building plans or ongoing legal disputes with the builders, as some lenders might not provide loans for the same.
  • Choose the interest rate of your choice:

    A fixed interest rate or a flat loan rate is not subject to the market conditions and remains constant for the entire loan tenure. If you are on a scheduled budget, opt for fixed interest rates. Alternatively, you can opt for a floating interest rate that varies as per the changing market conditions to capitalise on the cyclical interest rate, as the constant ups and downs may lead to an overall low rate of interest in a stable market.

  • Check the home loan prepayment charges:

    As per the prevailing home loan rules and regulations, if you opt for a floating interest rate, you won’t be charged for prepaying your outstanding loan amount. But for a fixed or flat loan rate, do check the applicable prepayment charges with your lending institution.

  • Choose the right lending institution for your home loan:

    Check the following aspects when finalising your lending institution:

    • The quality of customer service and the average turn-around-time for grievance resolution
    • The past trend of base rate changes and whether the bank or NBFC transfers the benefit of a lower interest rate to its customers
    • The offers on interest rates and processing charges
    • The time taken for loan approval and easy home loan disbursal


Buying a home in the current market, especially in a Tier-1 or metropolitan area, is nothing short of an achievement. And a home loan allows you to fund and fulfil this achievement. If you are looking for a luxurious dream home in the financial capital of the country, check out the residential properties in Mumbai by Piramal Realty.

Frequently Asked Questions

What are the eligibility criteria for basic home loans?

  • Age of applicant: Between 18 years to 60 years of age
  • Occupation: Salaried or self-employed with a steady source of income.
  • Income: Above the minimum income requirement laid down by the lending institution.
  • Credit Score: Above a specified limit.
  • Age of property: Certain older properties are not financed by lenders.

Any other criteria laid down by the specific bank or NBFC.

The actual loan amount approval also depends on the:

  • Ability to pay the down payment
  • Ability to pay the monthly EMIs
  • Existing loans and liabilities

What are the types of home loans?

  • Loans for home purchase
  • Loans for home construction
  • Loans for land purchase (only if the land is purchased for constructing a house)

Loans for home improvement (major renovations)

What are the documents required to apply for basic home loans?

  • Duly filled and signed application form
  • Passport-size photos
  • ID and address proofs
  • Canceled cheque for paying the processing and other fees
  • 6-month bank statements
  • 3 years Form 16 and ITR filing for salaried individuals
  • Proof of educational qualification, proof of business, 3 years of ITR, computation of income, 3 years of CA audited balance sheets, 3 years of profit and loss statements, etc., for self-employed applicants.

Disclaimer: This article is based on the information publicly available for general use. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.

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