Why is taking a joint home loan beneficial
Lenders consider credit score, income, job profile, age and monthly credit obligations before granting a loan to any borrower. If the applicant fails to fulfill any of the criteria, the loan application may be rejected. You may fail to collect the desired amount within the stipulated payment capacity. But taking a joint home loan can help you in such cases. Before taking a joint home loan, you should pay special attention to certain points given here. But before that let’s know who can be a co-applicant in a home loan.
If you are taking a joint home loan, any of your close relatives can be co-applicants. When it comes to joint home loan, lenders follow their own rules to know the relationship with the co-applicant. Generally in joint home loan they allow spouse, children, parents or your close relatives as co-applicants. Some lenders do not allow siblings and unmarried couples for joint home loans. In case of co-owned housing property all the co-owners of the property should be co-borrowers.
Increase Loan Eligibility Combining
your co-applicant’s source of income with his good credit profile also increases your loan eligibility. Your co-applicant is equally responsible for the home loan repayments. It reduces the credit risk for the lender and also increases your chances of getting a home loan. The income of the co-applicant in your loan is also taken into account while evaluating the EMIs you can afford, so if you add a co-applicant at the time of taking the loan, you may find it easier to get a higher loan amount.
Generally, most home loan borrowers have to repay their loan by the age of 70. That is why people around the age of 60 are either denied applications or are forced to opt for short-term loans with high EMIs. So in such cases adding a younger co-applicant to a joint home loan can help you in getting a home loan in the long run.
If the primary loan applicant has insufficient credit score, risky job or job profile, insufficient repayment capacity or monthly debt repayment liability exceeding 50-60 percent of income, the borrower’s eligibility for the loan decreases, so having a co-applicant on board proves beneficial
More Tax Benefits for Wife and Kids Getting Easy Claims
Both primary applicant and co-applicant of home loan can avail tax benefit independently as per contribution towards interest and principal payments. Under Section 24-B both the primary applicant and the co-applicant at the time of payment of interest on the property owned by him/herself at the time of payment of Rs. 2 lakh can claim for tax deduction. Similarly, they can avail a separate tax deduction of up to Rs 1.5 lakh under Section-80(c) for repayment of principal components of the home loan. But keep in mind that a co-applicant can get tax benefit only if he is also a co-owner of the relevant asset.
Low Interest Rates for Women
Many home lenders offer an interest rate relaxation of 5 bps on home loan application made with a female co-applicant. 5 Keeping in mind that the BSP concession will offer huge savings in the long run, a female family member should be included as a co-applicant in a home loan if the lender offers such interest rate concession.
Other ways to qualify for a home loan
Opt for a low LTV ratio, as it reduces the lender’s credit risk. This increases the chances of getting a home loan approval. Apart from this, lenders also require applicants to have full EMI obligations, including new home loans. Which should be within 50-55 percent of his monthly income. So one who crosses the specified limit can reduce his EMI by opting for a longer repayment term.