Joint home loans are home loans availed of by two or more than two individuals together. For joint home loans, the burden of loan repayment lies with all the loan borrowers. If you are planning to apply for a joint home loan, read on. In this article, we discuss the housing loan eligibility criteria and the benefits of joint home loans. So, read on.
Housing Loan Eligibility Criteria for Joint Home Loans
- Most lenders sanction home loans only to Indian nationals. However, some lenders do extend home loans even to NRIs.
- To be considered eligible for a home loan in India, all the borrowers must have a CIBIL score above 750. If your CIBIL is around 725, you may get approved for a loan. However, your negotiating power regarding the loan terms and conditions will be quite low.
- Lenders have strict eligibility requirements regarding joint home loan. Only close members of one’s family are accepted for joint home loans. For instance, while a son and a father or a husband and wife can avail of a home loan together, an unmarried daughter and father may not be easily sanctioned a loan by lenders. This is because the daughter’s marriage can lead to property ownership issues later.
- To be considered eligible for a home loan, all loan applicants must have a stable and separate source of income. They must be able to establish their ability to repay loan EMIs each month.
- Further, if you want to avail yourself of a home loan, it is important that all people who have applied for the loan together must be co-owners in the property against which the loan has been taken.
- Lastly, in the case of joint home loans, the tenor of the loan is decided based on the age of the eldest co-borrower.
If you meet the above-mentioned qualifying criteria, you can apply for a joint home loan.
Let us now look at the benefits of joint home loans.
Joint Home Loan: Benefits
- One of the most important benefits of a joint home loan is that when two or more people apply for a joint home loan, lenders take into consideration the combined repayment capacity and income of all the loan applicants while deciding the home loan amount to be sanctioned. Consequently, in the case of joint home loans, the amount sanctioned is normally higher than when only one individual applies for a loan. Being sanctioned for a higher loan amount makes it possible for loan borrowers to easily afford their dream home, even if it is slightly out of their budget.
- Yet another very big advantage of a joint home loan is that in the case of joint home loans, all the loan applicants can claim tax benefits separately under Section 80C and Section 24b of the Income Tax Act.
Under Section 24b, home loan borrowers can claim home loan tax benefits on the interest component of their loan. The upper limit mentioned under this section is Rs.2 Lakh. Section 80C concerns itself with payments made towards the repayment of the principal component of a home loan and the tax benefits available on the repayment of this component. The upper limit mentioned under this section is Rs.1.5 Lakh. Combined, an individual can claim home loan tax benefits up to Rs.3.5 Lakh under these two sections. However, when a couple avails of a joint home loan, they can claim home loan tax benefits separately under both these sections and maximize their home loan tax benefits to Rs.7 Lakh a year.
- Yet another advantage offered by joint home loans is that a joint home loan can make you eligible for better or lower home loan interest rate. There are two reasons behind this. First, when two people apply for a loan and are responsible for its repayment, the chances of a loan default automatically come down. Therefore, lenders feel more inclined towards sanctioning loans at lower interest rates and having the applicants onboard as clients. Secondly, most lenders offer lower home loan interest rates to female loan applicants. Thus, when a buyer adds his wife or buyer as a co-borrower they automatically become eligible for lower housing loan interest rates.
In short, a joint home loan can make your life much easier. If your spouse or another family member has an excellent credit score and is entirely trustworthy, you can consider availing of a joint home loan with them.
