Making purchase of a home is a tough job. Not only it requires proper planning, but also involves lots of hassles related to money.
There are times when people planning to apply home loan don’t qualify on the bank’s loan lending limits in wake of your limited income resources. It is where the concept of ‘Joint Home Loan’ comes into play.
Technicalities:
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.
