{"id":6136,"date":"2017-06-01T06:20:00","date_gmt":"2017-06-01T06:20:00","guid":{"rendered":"\/blog\/?p=6136"},"modified":"2021-12-10T04:18:25","modified_gmt":"2021-12-10T04:18:25","slug":"home-affordability-in-current-market-scenario","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/loan-for-home\/home-affordability-in-current-market-scenario\/","title":{"rendered":"Home Affordability in Current Market Scenario"},"content":{"rendered":"\n<p>Most people looking to buy a house will agree that properties have remained overpriced for last several years.<\/p>\n\n\n\n<p>But a slew of recent unexpected events seem to have happened in favor of home-buyers. Demonetization and RERA Act are slowly curbing the flow of black money in real estate. This will continue to have a downward pressure on property prices. Another reason for property buyers to rejoice is the lowering of borrowing rates.<\/p>\n\n\n\n<p>So a stagnation (if not a fall) in property prices alongwith low <a href=\"https:\/\/tata-blog.osian.dev\/home-loan\/fees-and-charges.html\">home loan rates <\/a>are making more and more people consider buying a house now than later.<\/p>\n\n\n\n<p>But affordability of property is not only dependent on external factors but also on borrower\u2019s financial profile. As buyers, most people are concerned with two things:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Whether they will get the loan amount they need?<\/li><li>Whether they will be able to easily pay the <a href=\"https:\/\/tata-blog.osian.dev\/home-loan\/calculator\/emi-calculator.html\">home loan EMIs<\/a> in future?<\/li><\/ul>\n\n\n\n<p>Additional Read: <a href=\"https:\/\/tata-blog.osian.dev\/blog\/home-loan\/dont-over-borrow-find-the-right-home-loan-amount\/\">How To Find The Right Home Loan Amount?<\/a><\/p>\n\n\n\n<p>Now lenders focus on both questions. The amount of loan that you can take depends first of all on the downpayment you make. Most lenders want borrowers to bring in 15-20% of the cost of the property as downpayment. So if you have Rs 10 lac for downpayment, you can expect to get a home loan of about Rs 40-45 lacs.<\/p>\n\n\n\n<p>But there is more to it. Lenders would then want to assess your ability to repay the loan. There is an unwritten rule that lenders avoid lending more if borrower\u2019s EMI-to-Income ratio exceeds 40%.<\/p>\n\n\n\n<p>Lets take a simple example. Suppose you want to purchase a house of Rs 50 lac. You have Rs 10 lac saved up for downpayment.<\/p>\n\n\n\n<p>Now the need of Rs 40 lac loan fits into the 15-20% downpayment criteria. But what about your ability to repay the loan?<\/p>\n\n\n\n<p>Additional Read: <a href=\"https:\/\/tata-blog.osian.dev\/blog\/home-loan\/home-affordability-in-current-market-scenario-2\/\" data-type=\"URL\" data-id=\"https:\/\/tata-blog.osian.dev\/blog\/home-loan\/home-affordability-in-current-market-scenario-2\/\">How To Ensure Easy Repayment of Your Home Loan EMIs?<\/a><\/p>\n\n\n\n<p>A Rs 40-lac loan at 9% for 20 years has EMI of about Rs 36,000. If you do reverse calculation (using lenders\u2019 40% rule), then this EMI is 40% of Rs 90,000 monthly income. So if your monthly income is more than that, lender wouldn\u2019t have much issue giving you the <a href=\"https:\/\/tata-blog.osian.dev\/home-loan.html\">home loan<\/a>. On the other hand, if your income is lower (lets say Rs 60,000), then lender might ask you to lower your loan requirement &#8211; which might not be possible if you don\u2019t have surplus money to increase your downpayment.<\/p>\n\n\n\n<p>That\u2019s how home affordability is evaluated by both borrowers and lenders.<\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-vivid-cyan-blue-background-color has-background\" href=\"https:\/\/tata-blog.osian.dev\/online\/loans\/home-loans\/#\/apply-now-home-loan.html\">Apply Now<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Most people looking to buy a house will agree that properties have remained overpriced for last several years. <\/p>\n<p><a href=\"https:\/\/tata-blog.osian.dev\/blog\/home-loan\/home-affordability-in-current-market-scenario\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":6144,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[25],"tags":[],"class_list":["post-6136","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan-for-home"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.13 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Home Affordability in the Current Market Scenario - Tata Capital Blog<\/title>\n<meta name=\"description\" content=\"Worried about affording a house in the current market scenario? 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Read this home loan blog by Tata Capital blog to get a deeper understanding of the market scenario and take an informed decision.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/home-affordability-in-current-market-scenario\/\" \/>\n<meta property=\"og:site_name\" content=\"TATA Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2017-06-01T06:20:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-12-10T04:18:25+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/01\/home-affordability-in-current-market-scenario.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"770\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Tata Capital\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tata Capital\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/home-affordability-in-current-market-scenario\/\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/home-affordability-in-current-market-scenario\/\",\"name\":\"Home Affordability in the Current Market Scenario - Tata Capital Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\"},\"datePublished\":\"2017-06-01T06:20:00+00:00\",\"dateModified\":\"2021-12-10T04:18:25+00:00\",\"author\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a\"},\"description\":\"Worried about affording a house in the current market scenario? 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