For most of us, buying a dream house is a big step towards securing our future. It is a once-in-a-lifetime investment and it needs to be carried out with a lot of planning. With the booming real estate market, buying a house is not easy. But with the option of a home loan, your dreams can turn into reality. A home loan can be taken either individually or along with another party which can include your family members, be it your parents, siblings or your spouse.

Who can be a Co-applicant/Co-borrower in a joint home loan?

An important thing to take note of while going for a joint home loan is that it can’t be taken with any random person. The co-applicant(s) must be a blood relative or a spouse. In some cases, if there are multiple owners to the property, for instance two sisters - then in that case it’s easy to apply for a joint home loan since both the sisters will be co-owners as well as co-applicants.

A co-owner may or may not be a co-borrower. A co-owner of the property has a share in the property whereas a co-borrower/co-applicant is liable to pay the loan amount. In a few cases, the lenders/banks insist on the co-owners being the co-applicants in the joint home loan. If co-applicants are spouses, then co-ownership is not mandatory, but if they are parents or siblings, then it becomes compulsory.

What are the benefits of a joint home loan?

Opting for a joint loan has a lot of benefits and some of them are mentioned below –

  1. Tax Benefits:
  2. Under a joint home loan, all the co-borrowers can claim for a tax deduction as per Section 24 of the Income Tax Act against interest repaid for up to INR 2,00,000 and Section 80C against principal repaid for up to INR 1,50,000 on a proportionate basis. Co-applicants thus have an option to plan for how much tax benefit they would like to avail and accordingly decide on the proportion of the loan each party is going to pay. While the provisions for tax benefits remain the same for both an individual home loan and a joint home loan, the benefits in absolute terms are higher in a joint loan.

  3. Eligibility for a higher loan amount:
  4. Having more than one applicant for a home loan increases your chances of availing for a higher amount which means you can buy a bigger house. Lenders consider the total income while assessing the repayment capacity and a joint income increases chances of getting a higher loan.

  5. Special Rates of Interest for Women Co-applicants:
  6. A lot of lenders in the market today offer differentiated home loan interest rate for women applicants which is comparatively on a discounted basis. This applies only if the woman is the sole or joint owner of the property and stands to be the primary or co-applicant for the home loan.

Opting for a joint housing loan is extremely beneficial for the applicants as it not only helps in buying a bigger or a better house but also ensures the debt and the overall responsibility is shared which in turn reduces the burden on one single person. If you're looking to buy your dream house, we suggest taking a joint home loan.

Learn more about your home loan eligibility here.

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



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