Joint Home Loans
Joint Home Loans are the best product among the Home Loan products available in the market. If both the partners are working, it makes it quite sensible to take a home loan jointly and contribute together for the EMIs. Joint home loans are in great demand these days due to the several benefits associated with it. Moreover, almost all the banks insist on Joint Home Loan even if the property has a single owner. You must be thinking what if the wife is non-earning or is a housewife, you will be amazed to know that even in this case banks are ready to prove a joint home loan on the name of both the partners.
But, before going for the one you must be aware of the pros & cons associated with a joint home loan.
Pros of Availing a Joint Home Loan
Bigger loan Amount
Compared to the loan amount which is approved to a single person, the loan amount approved for a joint home loan is always greater. This is because adding a co-borrower to a home loan increases your eligibility and as a result, you become eligible for a higher loan as a couple.
This can also help you when you are not eligibility for a home loan, adding a co-borrower to your home loan application can make you eligible for a home loan.
Let’s understand this with an example-
Rohan applied for a home loan for a loan amount of 30 lakhs. His annual income is 7 lakh and as per the bank, he is eligible for only 20 lakhs loan. But 20 lakhs is not enough to purchase the home he wants.
So, in this situation he has only 2 options, one drops his plan to take a home loan and the second one is to take only 20 lakhs and search a home in that range. But the ultimate and best solution to this is – adding his wife as a co-borrower. Doing this will increase his eligibility and they both can be approved for a loan amount of 30 lakhs together.
Tax Benefits
We all know that certain tax benefits can be availed for a home loan. These tax benefits are available under section 80C for the principal repayment and under section 24 on the interest paid. But do you know you can save much more this by going with a joint home?
Let’s see how is this possible
This is possible by adding your spouse as a co-borrower in your home loan. When you do so, both you and your wife become eligible to avail the above-mentioned tax benefits individually.
So, both can save 1.5 lakh each under section and 2 lakhs each under section 24. So this directly doubles your tax benefits.
Rebate on Interest- rate
Most of the banks offer a rebate on the interest rate for female home loan borrowers. So, to avail this benefit you can choose your wife to be the primary applicant and nominate you as the secondary applicant. Doing this can provide you the home loan on a lower interest rate as compared to others.
Cons of Availing a Joint Home Loan
Credit Score
In case when the borrowers are unable to pay the EMI of the home loan, in that case, the credit score of both the applicants will fall and hence future borrowing will be difficult for them.
In the Case of Separation
In case both the partners are separated and divorce is filled, ownership over the property becomes the reason to fight for.
In Case of Death
In case the primary borrowers die, the burden to pay the EMIS with the shift to the secondary borrower only, and in case he/she is not working it can become a major trouble.
Joint home loans are quite attractive as they come with major benefits, but we should think wisely before deciding anything as joint homes have some cons too.
