Complete Home Loan Guide for First-Time Buyers

Buying your first home is a major milestone—but the home loan process can feel confusing if you’re doing it for the first time. From eligibility checks to EMIs and interest rates, small misunderstandings can cost you time and money.

This complete guide is designed to help first-time home buyers understand how home loans work and how to get approved smoothly.

What is a Home Loan?

A home loan is a secured loan where the bank finances the purchase or construction of a residential property. The property itself acts as security until the loan is fully repaid.

Home loans offer:

• Lower interest rates than personal loans
• Long repayment tenures (up to 30 years)
• Higher loan amounts

Who Is Considered a First-Time Buyer?

You are usually considered a first-time home buyer if:

• You do not own any residential property
• You have never availed a home loan before

First-time buyers may also be eligible for government benefits and tax advantages.

Home Loan Eligibility Criteria

Banks evaluate eligibility based on:

1. Income

• Salaried: Stable monthly income and employment history
• Self-employed: Consistent business income shown in ITRs

2. Credit Score

• 700+ is preferred
• Higher score = better interest rate

3. FOIR (EMI Affordability)

• Total EMIs usually should not exceed 40–50% of income

4. Age

• Typically 21–60 years (salaried)
• Loan tenure should end before retirement

LTV (Loan to Value) Limits for Home Loans

LTV determines how much of the property value the bank will finance:

• Property value up to ₹30 lakh → Up to 90% LTV
• ₹30–75 lakh → Up to 80% LTV
• Above ₹75 lakh → Up to 75% LTV

The remaining amount is your down payment.

Documents Required

Common documents include:

• Aadhaar and PAN
• Salary slips or ITRs
• Bank statements (6 months)
• Property documents (agreement, title deed, approvals)

Having documents ready speeds up approval.

Interest Rates & EMIs

Most home loans are repo-linked floating rate loans, meaning EMIs change when RBI changes the repo rate.

• Longer tenure = lower EMI
• Shorter tenure = less total interest

Choose a balance that fits your income growth plans.

Common Mistakes First-Time Buyers Should Avoid

• Applying to multiple banks at once
• Ignoring credit score before applying
• Underestimating additional costs (stamp duty, registration)
• Choosing EMI close to maximum eligibility
• Not checking property legal status

How Direct Credit Helps First-Time Buyers

At Direct Credit, we simplify the home loan journey for first-time buyers. From eligibility assessment and lender comparison to documentation and disbursement, we ensure you get the best possible rate and smooth approval without confusion.

Contact Us

Planning to buy your first home and need expert guidance on home loans? The team at Direct Credit will help you choose the right lender, plan your EMIs, and get approved faster with complete transparency. Call us today at 9010031003 to make your first home purchase stress-free and financially smart.