What is a Joint Home Loan? How does it work?

What is a Joint Home Loan? How does it work?

By Ankita Patil
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Understanding More On Joint Home Loan

If you have taken a decision of buying your dream home, you can even go for a joint home loan by applying with your spouse or blood relatives. Understand the definition of co-applicant and follow the systematic process.
Recommended Read : Benefits of Joint Home Loan

With the facility of hassle-free home loans, buying of homes has become easy. If you are thinking of jointly applying for home loan, then your degree of eligibility can increase or you can even think of buying a better home. Besides home loan eligibility, you can avail other benefits too. Let us discuss the 6-core aspects of joint home loan.

Who is a co-applicant? - Your friend or your spouse or just anyone?

This is the striking question in your mind. A person who takes home loan jointly along with you is known as co-applicant. No, no. Do not confuse it with the co-owner. All the owners of a property are known as co-owners. If the co-owner is also a co-applicant, then it is always safer and better. A co-applicant can be your spouse or any of your blood relatives such as parents, brother, sister, son or daughter.

What about the documents?

Now, you need to collect and check all your documents. But whose documents? Well, the banks require documentation of both the co-applicants. If you are saying that only your documents are suffice for application, then banks won’t entertain your application. If your spouse or parent does not have an identity card, then it may hinder your loan approval. So, you need to collect and check documents of both the applicants for easy approval.

Your loan eligibility boosts with joint application

As earlier mentioned, this is one of the advantages of joint home loan. The banks consider the incomes of both the applicants. Hence, your eligibility value increases automatically. If both the applicants have good credit score and proper documentation, then you may have chances of demanding for higher loan amount. There, you get your bigger and beautiful dream home, isn’t it?

You and your co-applicant repay the loan amount

Now, it is not only your liability to repay the loan amount. You can share the repayment liability between you and your co-applicant. The EMI payments shift from you to the other applicant in case you have made a default in the loan repayment. The banks consider this as an advantage, as any one of the applicants will surely make the loan repayment.

Tax will not be taxing for you anymore

You get tax benefits under Section 80C and Section 24 of the Income Tax Act. Moreover, both the applicants are entitled to enjoy these tax benefits on a proportionate basis.

Need not worry about your bad credit score

During loan application, if your credit score is bad, then the lender may evaluate the credit score of your co-applicants. But this completely lies in the hands of the lenders. On the brighter side, if all the applicants have a good credit report, then you can get higher loan amount with easy approval.

Conclusively, joint home loan has a number of advantages. Just work carefully on this and harness the benefits.

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3 COMMENTS

  1. An excellent article that helps you understand various aspects of joint home loan. A joint home loan helps you share your debt-load as well allows you to get a higher amount of loan as the incomes of the co-applicants are also taken into account. One of the interesting facts about joint home loans is that, as many as 6 co-applicants can be added. So, before going for a home loan, one should definitely consider this option.

  2. Buying your dream house can become a reality, even if you can’t afford to pay the entire amount. You don’t have to compromise on your dream anymore. You can apply for a home loan easily. Also, instead of going for an individual home loan, you can opt for a joint home loan. You can add up to 6 co-applicants while applying. By doing this, you not only share the amount to be paid but also get a loan of a higher amount.

  3. Buying a home can be easy with the help of your friends and relatives, especially if you have a low credit score yourself. But the co-applicants have to agree to share the debt risk with you.
    This article neatly outlines the requirements of paper work and also defines who actually owns the house you are buying.

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