A joint home loan is much more than divided responsibility of the loan. Read on to find out more.
Home buying is not an easy task. From the big decision of acquiring a land to the everyday nitty-gritty involved, a homebuyer has a lot on her/his shoulders. While choosing a location is paramount, affordability also plays an equally important part. In fact, it goes on to determine the choice of location, size and comforts of the home.
Affordability is not just how far and how much you can contribute out of your finances, but also how cleverly considering the long-term impact on your finances. While buying a property out of one’s savings is a dream that many hold, many others look towards home loans to ease their financial burden and help them in the initial journey of buying a home. They even go on to extend their collateral to secure a property in their name. But the chances of getting a loan are marred by other already taken loans as well as one’s age, income, job stability and ability to raise a collateral etc.
But a way around improving one’s eligibility for home loans is having co-applicants who are in a job independent of the loan applicant. The lender whether anhousing finance company or a bank would consider the other applicant’s repayment capacity when disbursing the loan. This increases the loan amount as well as the benefits of tax that accrue on such loans. A family member or a relative can be a co-applicant. The co-applicant should have some source of income.
Eligibility for home loan
Since the loan repayment capacity of the co-applicant is also considered when applying for a joint home loan, it increases the primary applicant’s capacity. It means a big and better home where you are no longer bound by lack of finances. In this scenario, both the applicants’ income sources play a big role. The joint home loan doubles the capacity of the borrower.
Benefits on tax
If co-applicants are co-owners as well in a joint home loan, both of them can enjoy tax benefits on an individual basis. The criterion being that both should be paying the debts in their individual capacity and according to the proportion of loan amount against their names.
It helps to have a woman on board as a joint account holder. In some cases, women borrowers have different rates of interest on home loans, which are usually lesser than the normal ones. They have lower basis points as compared to the usual rates.
How to avail a joint home loan and pay it off
The requisite documents need to be in place along with identity proofs, KYC details and other proofs such as address proof, photo ID proof, among other documents. A joint home loan can be repaid through a joint bank account or through home loan EMI on an individual basis.