Planning to buy your dream home? Why not go for a joint home loan? It’ll help you to share your debt-burden and also allow you to get a higher loan amount. A joint loan can be taken by as many as six co-applicants.
Who can be a joint applicant for a home loan?
Joint home loans can be availed by an individual along with his/her spouse, parents, children or own siblings. Friends, sisters or living together unmarried partners are generally not permitted to apply for joint home loans. It is mandatory that siblings and parents are co-owners of the property. For spouses, co-ownership is not compulsory. Vishraam Builders, the most eco friendly builders in Thrissur brings you a run-through on the benefits of taking a joint home loan.
Avail more funds
In home loans where there is more than one person as applicant, the lender will approve your sanction based on the income and creditworthiness of all applicants. Hence you can get a higher loan amount for your flat in Thrissur. Lenders offer lower home loan interest rates to women.
Tenure of the home loan
The tenure of the home loan can be 20 years when the spouses are the joint applicants. When parents or siblings or children are co-applicants, the maximum term can be 10 years. The maximum home loan term may be restricted to the retirement age of the older applicant (in case of parents) if their income is also considered for repayment.
A joint home loan is considered beneficial as all co-borrowers can claim tax deductions under Section 24 of the Income Tax Act against interest repaid and against principal repaid under Section 80C for a financial year. The tax benefits that can be claimed would be in proportion to the share that the individuals have in the loan. You can also claim up to Rs. 2 lakh on interest repayments if you are residing in your purchased property. In case you have rented out the property or house, there is no limit on the tax deduction you can claim for interest repayments.
The deduction against interest payment can be claimed if the individual obtains possession of the property. The total benefits obtainable in consummate terms may be higher in a joint loan as compared to an individual loan. For a couple if they jointly apply for a loan for a self-occupied property held by them in equal proportion, then both the spouses would be able to claim deduction on the principal and the interest repaid separately from their incomes according to their respective share.
Repayment is easy
The burden of EMIs is lower on your individual incomes if it is shared by your co-applicant. When there are two people contributing towards repayment of a loan it allows you to pay higher EMIs over a shorter tenure & become debt -free faster.