In a person’s life, one of the biggest decisions to take a home loan. We indeed take this once in a lifetime decision very thoughtfully and after considering a lot of options.
Affordability holds a lot of importance as it determines the locality and size of your house. There is no second opinion that a Joint Home Loan has made it more affordable to buy a house without the stress and in a hassle-free manner. For considering if you are eligible for the home loan or not, many factors are put into thought such as the income level and your previous track records of repayment.
HOW TO ENHANCE YOUR HOME LOAN ELIGIBILITY
You are likely to get a home loan if you have a co-applicant with an independent salary slip. Your income acts as the judgment criteria of your repayment capacity.
THINGS TO KNOW ABOUT THE CO-APPLICANT
In most of the cases, an immediate family member is a co-applicant. The co-applicant can otherwise be any of the following
- A salaried Person
- A self-employed
- Non-Resident Indians
DIFFERENCE BETWEEN CO-APPLICANT AND CO-OWNER
There lies a difference between a co-owner and a co-applicant. A co-owner is a joint owner of the property; on the other hand, a co-applicant need not be a part owner of the property. It is obvious that all co-owners of the property will have to be co-applicants of the home loan. Despite that, it is not necessary that all co-applicants are the co-owners. For credit/loan appraisal, it’s only their income that is put into consideration.
JOINT HOME LOAN: A BOON
If you are applying for a joint home loan, then you enjoy certain benefits:
Higher chances of loan approval:
Just adding on their incomes, co-applicants can increase the value of their home loan application, it gets eligible for a higher loan amount, and hence one can avail a loan of a higher value than getting the loan alone.
By applying jointly for a home loan, tax deduction available on home loans can be enjoyed by the co-applicants separately, provided they are co-owners of the property, and each of them is contributing to the home loan repayment.
Women co-owners gain a special advantage:
When it comes to women applicants, the lenders provide a rebate to them on the interest rate of home loan, which is generally a few basis points lower than the current home loan rates prevailing in the market. To enjoy this benefit, a woman has to have the status of a sole or joint owner of the property and an applicant or co-applicant for the home loan.
When should you avoid a joint loan
In many cases, it is advised to go for a joint home loan, but there are also some factors to be kept in mind when a joint home loan needs to be avoided:
Your eligibility as a single applicant meets your loan requirement.
- Due to poor credit repayment records while you have a low credit score.
- In case you have already reached your maximum loan eligibility.
- Your retirement is around the corner.
The repayment responsibility is both individual and collective of all co-applicants. Loan payments are as per the convenience of applicants; they can do it separately through individual EMIs or do so through a joint bank account.
The must-have documents are your KYC (proof of identity and address), income, and property documents. These documents form a proof of your eligibility to avail a home loan. Make a note that all co-applicants’ KYC documents need to be submitted to the loan provider while income proof of only those co-applicants whose income is to be put into consideration for loan appraisal needs to be submitted.
A joint home loan not just reduces the burden of repayment but also brings a lot of other benefits such as tax savings. While the owner doesn’t have to worry about the repayment alone, it becomes a shared responsibility of both the owners who have applied for the loan.