It is important that before approaching a bank for loan, you need to estimate the amount of loan you need to borrow. The amount of loan you need to borrow is a function of the value of the property and available funds with you. Remember house loan is a long term loan, and hence it is advisable to minimise your loan amount to the extent possible. Limit your loan amount to the balance funds you need to fund the property after accounting for your own available funds. Also, based on the EMI you can service, try to opt for lowest tenure of loans as long tenure loans result in huge interest outgo.
Before taking a loan it is advisable to do an evaluation of your current monthly expenses including any EMI obligations that you have on your current loans. The assessment will help you to estimate the amount of EMI you can pay comfortably after taking into account other obligations. Once you arrive at the EMI you can service, you can also decide on the right loan tenure.
Your home loan eligibility is a function of value of the property and assessment of your repayment capacity based on your monthly income. SBI provides a LTV upto 90% and expects the borrower to fund the remaining value of property by own money. For example, at its lowest LTV 90 %, SBI would expect its borrowers to provide margin money of 10%. In case this margin payment is higher than your available funds as estimated by you, you might need to look for higher LTV loans, which may carry higher interest rates and hence, will result in higher EMIs.
SBI will also estimate your Fixed Income to Obligations Ratio to ascertain the maximum EMI you can service based on your current income and other monthly expenses. The bank applies a certain ratio to your income to estimate your monthly expenses and then adds your other EMI obligations to calculate your fixed obligations. The proportion of fixed income to your calculated fixed obligations gives your FOIR. SBI lends up to a maximum FOIR of 0.65 . Based on the FOIR, the bank will also estimate the maximum amount of EMI you can service as a borrower. SBI's assessment may be different from your own assessment. Any differences in assessment may require you to readjust your loan amount requirement. You may also consider paying back other running short term loans to improve your eligibility.

Author's Bio: 

Abhavya Soni,
Research Associate and SEO Analyst