Home buying for first time can be an overwhelming experience. It is a dream-come-true for many people and a landmark achievement for others.

However there are a few important factors you should analyze before buying a house. Here are steps to take to help you decide whether you're ready to take the plunge.

The purpose of buying a house: First decide why you need a house. Is it for investment or to live in it? The purpose of buying a home will help you in taking a call on where your home should be located and the kind of home loan or mortgage you should consider.

Timing  for loan? This is one big gamble every homebuyer faces. Financial experts would advice you to buy a house when the real estate prices are low and interest rates are reasonable. Now, how does one decide if real estate prices are low or not and if interest rates are reasonable enough? It is important to understand the kind of circumstance you are in. A home loan is a big commitment, it is important that you don't make a hasty decision. Before you take on the heavy burden of home loan, make sure you would be able to afford the bridge funding for the house you will have to do and also the EMI on a monthly basis.

What is loan to value? Loan to value is the term that describes the size of your loan. It is usually 80-85 per cent of the cost of the buying your home. So if your home costs Rs 10 lakh the loan to value would be around Rs 8.00 or 8.5 lakh depending on your eligibility.

Check your credit score: Your credit score is a summary of your credit history. It shows your credit worthiness, based on which lenders decide whether or not to offer you a home loan or mortgage. In India, Cibil is the leading credit information company which provides Credit scores. In fact we at Creditvidya.com advice people to check their credit report regularly to eliminate any errors.

(Contributed by Rajiv Raj, director and co-founder at Creditvidya.com)