What Are The Benefits Of Joint Home Loan

What Are The Benefits Of Joint Home Loan

What Are The Benefits Of Joint Home Loan
Co-owners are jointly liable to re-pay the loan amount; a default by one applicant would force the other to discharge the liability. (Dreamstime)

If you are planning to buy a home, consider taking a joint loan instead of individual loan. A joint home loan is less stressful and you can share your debt-burden. Also, you can apply for higher loan amount as the co-applicants monthly income is also taken into consideration by the lender.  However, there are limitations on who can be your co-applicant in a home loan

Since borrowing a home loan with a co-applicant comes with many benefits and perks, MakaanIQ lists few of them-

  • Increase in home loan eligibility 

Income of all the co-applicants are considered for home loan eligibility. This is one of the significant advantage of joint home loan as the lender considers the pooled income and not the individual income. 

  • Tax rebates and deductions

All applicants in joint home loan are eligible for tax rebates under section 80C and section 24. These deductions are capped at Rs 1.5 lakh for principal repayment and Rs 2 lakh for interest repayment and additional Rs 50,000 under section 80EE for first time homebuyer. 

  • Multiple co-applicants can share debt burden

There can be up to 6 co-applicant in a joint home loan depending upon their credit profile. However, there are limitations and only selected relatives can be your co-applicant. 

  • Co-applicant may not be co-owners

While banks insist on all the co-owners to be co-applicants but the reverse is not true. 

Documents required

- Know Your Customer (KYC) documents of all the co-applicants

- Income proof of all the applicants

- Proof of co-ownership

What if co-applicant refuses to pay the share

Since the liability to repay the loan as per schedule is joint on the part of each co-applicant therefore, each party would be liable for the repayment. While banks does not care whether the payment is made in the normal course by only one of the joint borrowers as long as the full monthly instalment is paid as per schedule. However, in the event of default, the lender will proceed with the usual recovery process which may include a legal recourse against all co-applicants.

Last Updated: Thu Nov 01 2018

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