As per reports, home Loan are expected to rise by up to 17-19% in FY 2019. The steady rise can accredited to several credit-linked housing facilities. Like the Pradhan Mantri Awas Yojana which are introduced by the government to make housing affordable.
Besides such schemes, there are several other benefits extended by home Loan providers. Which applicants can avail on fulfilling the terms and conditions set by the government.
For instance, financial institutions encourage individuals to apply for a joint home loan, preferably with their spouse to make the process of purchasing a home more affordable. Credit options like joint loans give borrowers several advantages over those individuals who apply for a housing loan single-handedly.
Benefits of co-applying for a home loan with spouse –
Applying for a home Loan with your spouse as a co-applicant lays a positive impact on your credit profile and helps to posit a high credit score.
The following pointers highlight the other significant benefits of applying for a joint loan –
- Enhanced eligibility – Income is one of the factors that can affect home loan eligibility. When borrowers co-apply for a home mortgage with an individual having an independent income source. Lending institutions weigh their pooled income to gauge their loan repayment capacity. It helps avail the loan by improving borrower eligibility. However, before applying, you must check your eligibility with a home loan eligibility calculator to confirm.
- Substantial loan amount – Borrowers who co-apply for a loan with their spouse improve their eligibility to avail a higher loan value. For instance, if an individual is eligible to avail Rs. 20 Lakh as loan amount and his/her spouse is eligible to avail a loan of Rs. 30 Lakh, together they would be eligible to avail Rs. 50 Lakh as a joint home mortgage.
- Exclusive benefits for women – Most financial institutions extend special benefits to women applicants. They often provide them with a lower home mortgage interest rate and also charge a comparatively lower stamp duty fee for house registration.
Home loan borrowers can avail these exclusive benefits if the wife is the primary co-applicant for the said loan.
- Tax exemptions – Several financial institutions like Bajaj Finserv offer joint home loan tax exemption of up to Rs. 1,50,000 under Section 80C and up to Rs. 2 Lakh under Section 24(b) on their home loan.
Nonetheless, co-applicants and joint owners of a housing property are deem eligible to claim tax exemptions on their joint home loan.
- Loan repayment – Borrowers can enjoy easy home loan repayment options to choose from. The monthly instalment amount estimate with the help of an EMI calculator can either paid from any of their accounts or through their joint account. Similarly, they can also share the total number of EMIs between them and pay as per their convenience.
Though co-applying for a home mortgage has its share of benefits, individuals must be clear about a few things beforehand. For instance, if either of the co-applicants default their EMI payment, it will negatively affect both applicants’ CIBIL score. In turn, it will hamper their eligibility to avail a loan in the future.
Additionally, borrowers should make suitable arrangements to ensure the liability of their joint home mortgage is not borne entirely by a single applicant. As a means, borrowers can opt for a term insurance plan and include their loan’s liability in its coverage. They can also come up with an agreement and get it notarize to help resolve disputes that may arise due to differences in opinions between the co-applicants.