No, you cannot get a home loan for the entire property value as the Reserve Bank of India (RBI) has capped the Loan-to-Value (LTV) ratio of housing loans. As per the RBI guidelines, the LTV ratio can go up to 90% of the property value for loan amounts up to Rs 30 lakh; for loan amounts above Rs 30 lakh and up to Rs 75 lakh, the LTV ratio limit is up to 80% of the property value and for loan amounts above Rs 75 lakh, the LTV ratio can go up to 75% of the property value. This implies that at least 10% of the remaining value must be shelled out by the borrower as down payment.

Subject to the caps set by the RBI on LTV ratios, banks/HFCs further fix the LTV ratio on the basis of the risk assessment and credit profile of the loan applicant. Those with lower creditworthiness are usually offered lower LTV ratio.

Ans. Some lenders use the Multiplier Method for determining your maximum home loan eligibility, wherein the eligible loan amount is calculated based on a predetermined multiple of an applicant’s net monthly income. They usually offer loan amounts of up to 72 times of an applicant’s gross monthly income or 6 times of their gross annual income (in case of applicants other than salaried). Others use the EMI/NMI Ratio, wherein the total EMI obligations of the applicant should be within a predetermined proportion, usually 50-55% of the applicant’s income. Some lenders also use a combination of both of these methods to find the loan amount eligible of the applicant.

Ans. Home loan features such as interest rates, loan amount, tenure and processing fees can vary widely across lenders depending on their cost of funds and credit risk assessment of their loan applicants. Thus, visiting koshfinpro.com will allow you to compare home loan offers by its 20+ partner banks and HFCs based on your monthly income, repayment capacity, credit score, occupation profile, employer’s profile and other applicable eligibility criteria.

Ans. Lenders consider the repayment capacity of home loan applicants while evaluating their loan application and loan amount eligibility. house loan lenders usually prefer lending to home loan applicants having total EMIs, including EMI of the proposed home loan, to be within 50-60% of their monthly income. Hence, home loan applicants can use online home loan EMI calculator to find out the optimum house loan amount and tenure based on their repayment capacity.

Ans. It is difficult to say which home loan you will get with a low credit score as different lenders have different credit risk policies. Hence, consumers with poor credit scores should visit online marketplaces like Paisabazaar.com to check and compare housing loan rates and other loan features such as tenure, processing fees and other related costs from various banks and HFCs.

Ans. Lenders prefer sanctioning housing loans to applicants having credit scores of 750 and above as such high credit scores reflect responsible credit behavior and reduce credit risk for lenders. This is also the reason why many lenders offer lower home loan rates to applicants having high credit scores. However, some lenders offer home loan to applicants having low credit score at higher interest rates. Therefore, one must check their credit scores at regular intervals.