Common sayings assure us that there is safety in numbers – the more a load is shared, the easier it is to complete the task. The task of buying a new property is no different, with two or more hands contributing towards its payment, instead of a solitary one. Be it while putting down the down payment or while availing of a home loan, a joint undertaking makes all financial commitments comparatively easier.
Joint home loans are encouraged amongst households that have dual or more stable income sources, as it allays lenders’ reservations about delayed payments and loan defaults and for borrowers, the repayment burden is spread evenly amongst the co-applicants. It also leads to increased home loan eligibility, which allows lenders to sanction home loans at more favourable terms, such as lower interest rates, amongst other things.
However, many Indian households still shy away from applying for joint home loans due to unaddressed qualms and a lack of clear information. With Diwali and the festive season fast approaching, let us answer your home loan queries so you can be home loan ready for your new home just in time. To learn more, read on.
Benefits of Taking a Joint Home Loan for Your Dream Home
Joint home loans are the ideal home loan type for households that have more than one stream of steady income, as it allows co-borrowers and applicants more opportunities to seek a low interest home loan. Here are some notable benefits of availing a home loan together –
- Increased Home Loan Eligibility
One of the most necessary pre-cursors to availing of a home loan is evaluating one’s home loan eligibility. Lenders assess the profile’s home loan eligibility to gauge the applicant’s repayment capacity, credit history, and home loan viability. To be more specific, here are some key parameters that lenders evaluate, while making a note of your home loan eligibility –
- Credit report and CIBIL score
- Employment profile
- Stable income source
- Ongoing financial commitments
- Ongoing debt commitments
- Repayment capacity
- Repayment history
Ideally, all home loan applicants should ensure that they have maximised their home loan eligibility so they can hope to receive the best that their selected lender has to offer. However, in the case of a joint home loan, all applicants’ eligibility is considered which means that the collective eligibility is considerably boosted. So even if one of the applicant’s eligibility misses the mark, another co-applicant’s eligibility can supplement the shortfall, ensuring that their home loan requirements are not hampered due to low home loan eligibility.
An increased home loan eligibility helps applicants secure home loans with favourable terms such as a low home loan interest rate, a flexible repayment tenor and other repayment schemes such as select EMI programmes, etc.
- Increased Ease of Repayment
Apart from increased home loan eligibility, availing of a joint home loan also helps the borrowers repay the home loan amount with more ease and flexibility. All co-applicants who have been listed as borrowers on the home loan application are obligated to contribute to the home loan repayment amount – which ensures that everybody contributes equally to elevate the repayment burden.
Typically, in single applicant home loans, only one person bears the EMI repayment responsibility, which could potentially weigh down their individual finances. With a joint home loan, however, borrowers can repay the home loan amount together with whoever they have borrowed the home loan with. Typically, the following relations usually opt for a joint home loan –
- Spouses
- Fathers with sons
- Either parent with an unmarried daughter
The list is not exhaustive and note that each lender can have their own set of norms when it comes to allowing co-applicants to apply for a home loan together.
- Increased Tax Benefits
It’s a known fact that home loans double up as a tax saving investment, along with an easy funding solution, and with a joint home loan, all applicants can avail of considerable tax benefits through their home loan repayment.
Borrowers can claim tax benefits under the Income Tax Act under Section 24(B) and Section 80C, for the interest paid on the home loan amount and the principal amount respectively. Note that each co-borrower can claim these rebates individually, on the same home loan – a move that goes a long way in securing tax savings.
The savings on a home loan don’t just end here. Female borrowers are eligible for additional concessions (in certain Indian states) applied on stamp duty charges, registration charges and other miscellaneous fees tacked on to home buying and home loans.
Apply for a Joint Home Loan Today
Joint home loans have countless benefits, and benefits that help you save substantially on what you stand to pay as the cost of owning property, through a home loan. Ensure that you have done your research and apply for a joint home loan before the festive season and promotional offers run out.