In India, purchasing a property is typically the single largest investment a person will make in their lifetime. We plan for the future as our families grow. We invest in larger homes that can comfortably accommodate and protect a growing family. Such fantasy homes, on the other hand, are expensive, necessitate a large sum of money. And hence necessitate careful financial preparation. You build a checklist of items to consider in order to realize your dream home. Affordability is the most important factor (among these). A house’s price determines its size, location, quality, and purchase feasibility. The majority of home buyers are opting for home loans from financial organizations and banks as residential property prices rise.
The size of a house loan and the interest rate that applies are determined by a number of important characteristics, including age, income, repayment history, and tenure. You should also think about your ability to pay the EMIs. It’s a good idea to have a co-applicant if you want to increase your chances of securing a loan while also lowering your financial obligations. You should be aware of the various advantages of a joined home loan in India. But first, let’s look at who might be a co-applicant.
Role of a co-applicant in a joint home loan
When a lender considers an application, all they want to know is whether the applicant will be able to pay back the home loan, as well as their other debts. As a result, they usually set aside a specific part of your income to meet your existing expenses when assessing your eligibility. After calculating interest repayments and monthly installments, an individual’s eligibility is determined by the discretionary amount left over.
You can add another co-application or applicants to a combined house loan who will be accountable to pay the home loan alongside the primary applicant. The loan’s liability is shared by both or all co-applicants. Immediate family members, such as the father, mother, spouse, children, and sibling, are usually the most qualified co-applicants for joint house loans.
The co-applicant or co-applicants may or may not be co-owners of the property, but they are still responsible for the loan repayment. The property’s co-owner, along with the other owners, is a joint owner. Lenders need all co-owners to also be co-applicants on house loans as a precaution and sensible underwriting practice, although this is not always the case. When considering combined home loans, the primary applicant should weigh the advantages and disadvantages carefully.
Benefits of joint home loan
When compared to an individual home loan, there are a number of added benefits to contemplating a joint home loan. Here are various advantages of a joint home loan.
Tax advantages
All co-applicants are eligible for tax benefits on their own. Co-applicants must also be property owners and contribute to the monthly installment repayment of the home loan in order for this to happen. You can deduct interest paid from your taxable income under Section 24 (b). Amounts up to INR 2 lacs can be deducted. You can claim tax benefits against the principal repayment under Section 80 C of the Internal Revenue Code. Up to INR 1.5 lacs can be deducted under Section 80 C. Both tax benefits are available to each of the co-applicants separately. As a result, INR 3 lacs is exempt under Section 80 C, while INR 4 lacs is exempt under Section 24 (b).
Higher loan amount eligibility
When you add an income-earning co-applicant to a loan, the lender takes into account all of the applicants’ income levels and calculates an eligibility amount that is larger than that of a single applicant. This permits candidates or families to take out a larger home loan or buy a more affluent home because there is more room in their budget.
Lower interest rate
Individuals can add their spouses or mothers as co-applicants for a joint home loan and as joint property owners to get reduced interest rates. This is advantageous because most Indian lenders charge women borrowers a cheaper interest rate. The interest rate for female borrowers is 10 to 25 basis points lower than for male borrowers.
Repayment responsibility
The repayment of principal and interest is an additional benefit of a combined home loan. Both applicants can share the EMIs. It can be paid individually or collectively using a variety of payment methods, such as check or electronic clearance. Though the applicants will benefit from working together to repay the debt. It’s an important feature of a combined house loan.
Co-applicants and first-time loan applicants can use the combined home loan. It is used to improve their credit score, making future loan applications for various purposes easier. In today’s fast-paced world, a joint home loan makes sense. Both candidates can contribute to the construction of their ideal home, alleviating one another’s load. Because it is a joint duty, both co-borrowers must manage their respective portions of the debt effectively. There are numerous advantages to taking out a home loan, and they will only help you buy your ideal home.
