News: Five Checks Before Buying a Home: From the 40% EMI Rule-22-02-2026

Rohit Sarda, a 34-year-old IT professional in Bengaluru, wants a two-bedroom apartment for Rs 80 lakh or less. He begins with affordability, keeping the EMI below 40% of net monthly income and using online calculators that include stamp duty, registration and maintenance. He shortlists RERA-approved projects near metro lines, weighing commute, schools, hospitals and upcoming infrastructure.

Buyers generally should track interest rates, valuation trends, infrastructure plans and policy changes, and judge an area’s long-term appreciation by its growth plans. Five factors stand out.

1. Affordability. Look at the total cost of ownership, not just the price. The EMI should ideally stay within 40% of net monthly income and total debt obligations within 45-50%, leaving room for savings and other spending. Do not stretch simply because a larger loan is available. Add stamp duty, registration and processing fees, plus property tax, insurance and maintenance. A PNB Housing Finance spokesperson said tax benefits and interest subsidies such as PMAY-U 2.0 for first-time buyers help, but the purchase should be comfortable without leaning heavily on them.

2. Credit score. Adhil Shetty, CEO, BankBazaar, said borrowers scoring 750 and above are seen as lower risk and usually get the most competitive rates; the score also determines eligibility. Those in the 700-725 range may pay more, and even a marginal difference can cost lakhs over a typical 20-year tenure. Pay EMIs and card bills on time, keep credit utilisation under 30 per cent, avoid multiple loan or card applications before applying, maintain a balanced credit mix and review reports for errors.

3. Location and connectivity. Check proximity to workplaces, schools, hospitals, public transport such as Metro and RRTS, and daily amenities. Areas with infrastructure upgrades, better connectivity and job growth also tend to help applicants secure better loan terms. Emerging micro-markets backed by government-led infrastructure can offer strong long-term potential.

4. RERA compliance. Confirm the project meets all legal and regulatory requirements. The PNB Housing Finance spokesperson advised choosing RERA-compliant projects by reputed developers, ensuring documentation is in place and verifying there is no pending litigation or encumbrance.

5. Developer track record. Delayed possession is among the biggest risks in under-construction projects, disrupting financial plans and raising costs. Review whether earlier projects were delivered on time and whether complaints or cases exist against the builder. Assess its financial health, since cash flow trouble can stall work, and verify escrow compliance under RERA, which ensures buyers’ money is used for that project’s construction.