There is no decision that is as much overwhelming and satisfying as the self made decision for buying a dream home. However in most of the cases this decision is supported by home loans. Though its a question of eligibility as well. The home loan eligibility can go up substantially if it is a joint home loan rather than individual home loan and you can take an extra step towards buying a bigger and better house.
Joint home loan enables you to take loan with your family member. At the same time, with its advantages, it has some limitations too.
Following are all must know points about joint home loans.
1. CO-APPLICANTS : Most of the times people easily get confused about co-applicant and co-owners. Well, here is the difference – A co-applicant is the person who jointly takes a loan along with the primary applicant. However co-owner includes all the owners of the single property. Banks insist all co-owners to be the co-applicants too. So, all co-applicants may not be the co-owners of the property however, all co-owners can be co-applicants. A co-applicant can be any one of your family member including your spouse, parent, sibling or child.
2. PAPERWORK : Paperwork is very crucial part of home loan processing. In case of joint home loan. both the applicants have to provide all required documents for processing. The documents required for home loan includes : Permanent Account Number (PAN), Address Proof, Income Proof, Bank Statements And Documents Relating to the Property.
3. LOAN ELIGIBILITY : Increase in the loan eligibility is one of the biggest advantages of a joint home loan. The bankers consider the income of all the co-applicants and increase the loan eligibility value.
4. REPAYMENT LIABILITY : All the co-applicants are liable to repay the loan amount so all are responsible for for the repayment. However the dark side is – If one of the borrowers fail to pay, the responsibility of footing the equated monthly installment (EMI) automatically shifts to the other borrower.
5. TAX BENEFITS : With equal repayment responsibility, the tax benefits also get shared among the co-applicants. Under Section 80C of the Income Tax Act (IT-Act), a home loan borrower is eligible for tax benefit of the principal re-payment of up to Rs 1 lakh and Rs 1.5 lakh of interest re-payment under Section 24 of the same act. In case of a joint home loan, both applicants are eligible to enjoy these benefits proportionate to the extent of contribution towards re-payment.
6. CIBIL SCORE : Cibil Score is another important factor of home loan. If all the applicants in a joint home loan have a good Cibil score, then it is a nut job to get the loan approval. If one of the applicants has a bad Cibil score then the bankers do not consider his/her income to increase eligibility, but the lenders do make exceptions in certain cases. Considering the income of a person who has a bad Cibil score is completely at the discretion of the lender.
Conclusion : Its very important to understand that the joint home loans comes with a basket of benefits and proportionate liabilities. So, to enhance your loan eligibility, approach your blood relatives with a clear strategy to repay the loan amount on time.
Post By :
Alok Kumar Upadhayay
Real Estate Professional