Joint Home Loans: Easiest Way To Realize Your Home Dreams

Nothing is more troublesome than purchasing a house of your dreams. It involves lots of hassles and money. Sometimes, even you don’t qualify on the bank’s loan lending limits in wake of your limited income resources —this is where concept of ‘Joint Home Loan’ comes into play.Joint Home Loans Easiest Way To Realize Your  Home Dreams



Co-Borrowers and Co-Owners

Someone who applies for the home loan jointly with you is termed as a co-borrower. At present, majority of the banks make sure to co-borrowers are co-owners of the property too.

Time Period

Depending on who your co-applicant is (whether a spouse or sibling or child), the time period of loan is decided by the bank and this may range from 10-25 years. There are some cases of parent-child applicants too, where the loan period was extended till retirement age.

EMI Payment

As the loan is incurred by more than one person therefore, EMI’s can be paid using single or joint bank account. The borrowers can also divide the number of EMI’s among them as per convenience. All the borrowers are liable to pay for the availed loan amount and in case one of the borrowers refuses to repay the amount, the others become automatically liable to pay.

Documents Required

The mandatory requirements required are address proof, ID proof, income proof, bank statements and proof of co-ownership of the property.

Reasons For Their Popularity Are:

Larger Loan Amount

Let’s take an example of   Mr. X who applies for loan against a property of 60 lakhs with a banking institution. The bank agrees to lend him Rs 40 lakh while the remaining amount he needs to furnish himself. However, due to crunch of funds, the only option that remains by his side is to drop the plan completely or go in with a cheaper alternative.

Conversely, if his wife is an active earning member and wishes to invest in the project, he can choose a joint home loan option. In that case, lending institution or bank will consider both their incomes and determine the eligible limits of loan which can easily fund their cause.

Extra Tax Benefits

As per the Indian Income Tax Act, both principal amount as well as interest repayment is eligible to be deducted from one’s income under Sec 80C and Sec 24 (b) of the Act respectively.

Therefore, a person can claim up to Rs 1 lakh rebate on principal and Rs 1.5 lakh on interest repayment in a fiscal year. Nevertheless, in case of a joint home loan, Mr. X can claim tax rebate on both his and spouse’s income tax returns in identical proportions. They can claim Rs 2 lakhs (Rs 1 lakh each) on principal repayment amount and Rs 3 (Rs 1.5 lakh each) lakh on interest repayments.

Ashish Pandey

I am a business and finance journalist who is currently employed at Financial Express and previously at Zee News. My areas of interest include business and foreign policy. You can reach me on Twitter at @ashuvirgo1984 or @eFundsPlus.

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