- Often home loans are borrowed jointly to ease the repayment burden.
- Involvement of more than one individual in a loan usually ensures a larger loan quantum.
- Joint housing loans help both the applicants to benefit from tax deductions.
A significant hike in property prices in the last decade has made it quite difficult for individuals to buy their dream home. For instance, in the April to June quarter of 2019, property prices in Delhi appreciated by 4.4%.
As such, many opt for various home financing options facilitated by financial institutions. Housing loans are the best finance alternative in this respect, considering they not only provide ample funds but also assist an individual through the entire process of owning a home.
Home loans come in different types with varied features. One of these types is a joint home loan. Lending institutions usually provide an applicant with the option of availing a home loan jointly with another co-borrower. The co-borrower could be his/her spouse or blood relatives such as parents, children, siblings, etc.
Often home loans are borrowed jointly to ease the repayment burden. Co-applicants can access the EMI calculator to calculate and share the number of EMIs between them to repay the loan conveniently. This is, however, only one of the many benefits of availing a joint housing loan.
Benefits you can enjoy through a joint home loan
While availing a joint housing loan, it is not mandatory for a co-applicant to also be a co-owner of the property which is being purchased. This is, however, not applicable in the case of relatives or siblings. Moreover, a
- Access to a higher amount of funds
Since more than one individual is involved in this loan application, a lender considers the income and creditworthiness of both applicants before approving or disapproving the loan request. Such involvement of more than one individual in a loan usually ensures a larger loan quantum. You can avail a housing loan up to Rs.10 crore jointly with your co-applicant at affordable home loan interest rates.
- Tax benefits
Joint housing loans help both the applicants to benefit from tax deductions. In case both the applicants are co-owners of the property, both of them can claim tax deductions against the repaid interest under Section 24(b) of the Income Tax Act. Tax benefit on a joint home loan can also be availed under Section 80C against the repaid amount of principal. An individual can claim tax deductions up to Rs.1.5 lakh under Section 80C and Rs.2 lakh under 24(b). If a person has availed the loan in the ratio of 50:50, both the applicants can claim home loan benefits separately. This helps in expanding the combined limit, thereby reducing the overall cost of the loan.
Concessions are an important point you must consider while understanding everything about joint home loans. Various lending institutions offer lower home loan interest rates to women applicants. Thus, having your wife as a primary applicant in the housing loan might help you to save on the gross interest outgo. In the case of stamp duty as well, the registration fee is lower for women and couples.
You can use the home loan eligibility calculator to check if you and your co-applicants can qualify to avail a joint housing loan. Online tools like these help customers pre-determine their chances of availing a loan.
Benefits provided on joint home loans are likely to vary from one lender to another. You must go through the loan policies from different lenders to find the best features and benefits on housing loans.
Joint home loans help better loan eligibility of individuals and make way for them to share debt and financial responsibility. Another important point to consider while availing a housing loan is how a joint home loan might affect your credit score. Make sure to choose your co-applicant wisely so that you can minimize default from his/her part