Home Loans: How to buy your first home despite high interest rates?

livemint.com:

home loans necessitate larger payments from home buyers when repaying their debts through equated monthly installments (EMIs). When faced with a higher interest rate, a larger portion of your EMI is allocated to interest rather than reducing the principal amount, resulting in a higher monthly payment.

Higher EMIs can put a strain on your finances, making it more challenging to manage additional expenses and potentially limiting the amount you can borrow.With high interest rates, it becomes even more crucial for first-time home buyers to carefully assess their finances before making a purchase.The first step is conducting a thorough financial assessment, akin to taking a financial X-ray of yourself, before committing to buying a home.Focus on your income, which forms the bedrock — understanding how much you consistently earn each month. Understand your debts: Encompassing existing loans, credit card balances, and any other outstanding obligations that will vie with your mortgage payment.Consider your spending patterns.

By comprehending where your money goes each month, you can determine if there’s flexibility for extra housing expenses without compromising your lifestyle or financial objectives. Is your credit score strong?A high credit score can secure better loan terms and lower interest rates, potentially saving you thousands throughout the loan term.

Apart from interest rates, your credit score could impact other loan terms, such as the required down payment or the maximum loan amount you qualify for.Nevertheless, your credit score is merely one aspect lenders review when assessing your mortgage application. They also scrutinize your income, debt-to-income ratio, and employment history.