A home is a ‘once-in-a-lifetime’ investment for many of us. It is natural that we want to make it as big and better as practically possible. Here comes the Joint Home Loan which makes it more affordable. Affordability is what determines the size, location and quality of our home. No doubt, having the possibility of availing a home loan has improved loan bracket limits.
However, your home loan eligibility depends on your age, income levels, other loans that you are still repaying, etc. Lenders have prudent norms which stipulate that your home loan EMI combined with all the other EMIs that you may be presently repaying, cannot exceed a certain level of your take-home pay.
Following are the benefits of taking a joint home loan:
Increases Your Home Loan Eligibility
You may consider having your spouse or family member as the co-applicant, as this is a proven way to get a higher loan amount sanctioned.
By pooling your and your spouse’s incomes together while making a joint home loan application, the loan application becomes eligible for a higher loan amount and can hence afford a bigger / better home.
Buy a Bigger Home
Having more budget in hand to buy your dream home is important. You may plan to buy a bigger house with the help of joint home loan. In fact, we compromise on small room size, less space due to budget crunch. Due to joint home loan you will get additional loan amount. Bigger home will solve many of other space and occupancy related issues. You may find is better to apply the loan with your spouse or family member as a co-applicant
Higher Tax benefits
By applying jointly for a home loan, tax deduction available on home loan can be enjoyed by the co-applicants separately, provided they are co-owners of the property and each of them is contributing to the home loan repayment. a) Principal repayments are eligible for deduction under Section 80C of the Income Tax Act up to a maximum limit of Rs.1.50 lakh. b)
Home loan interest payments enjoy tax deduction under Section 24 up to Rs 2 lakh if the property is self-occupied; if the property is let out, the entire interest becomes eligible for tax deduction, i.e., there is no maximum limit.
Women Co-applicant gets lower rate of Interest
Many bank and NBFCs offer a differentiated home loan interest rate for women customers, which is usually a few basis points lower than the normal home loan rates. To take benefit of the discounted interest rate, a woman has to be the sole or joint owner of the property and an applicant or co-applicant for the home loan.
Hence it is always wise to include a women co-applicant in your joint home loan application.
Share Your Debt Burden
When you share the loan amount, you also share the EMI Burden. Both co-applicant share the debt burden. Your EMI may end quite early. Repayment of joint home loan will be early and this will give you more financial freedom.