If you are also dreaming of buying a house, then there is very beneficial information for you! Nowadays, instead of taking a home loan alone, people are preferring to take a joint home loan with a family member. Be it husband-wife, siblings, or parents-children, taking a loan together not only gives a higher loan amount but also provides many types of tax benefits. Experts say that if you are thinking of taking a joint home loan, then it is very important for you to know some things.
A big advantage of taking a loan together
There are many reasons for the increasing popularity of joint home loans. When two people apply for a loan together, their income and credit score are added. This gives the bank more confidence in its ability to repay the loan.
Key benefits of a joint home loan
1. You can get a higher loan amount based on the combined income of two people.
2. Under Section 24 and Section 80C of the Income Tax Act, both co-applicants can claim separate tax exemptions.
3. Often, banks give loans to women at a lower interest rate, which reduces the interest rate on a joint application by husband and wife.
4. The repayment period in a joint loan can be extended up to 20 years.
Keep these things in mind before taking a joint home loan
According to Atul Monga, CEO of Basic Home Loan, taking a joint home loan with a family member shows mutual trust, but it is also important to take care of financial aspects, correct documents, and ensure clear communication. Munish Jain (Capri Global) says that there is also a saving in EMI in a joint home loan.
What to look for while choosing a co-applicant
The financial stability of the co-applicant is extremely important. Experts say that taking a joint home loan with parents should be avoided, especially if their retirement is near. Income is affected after retirement, which can impact repayment capacity. You should choose a co-applicant who has similar future financial goals as you.
What if one partner defaults
Experts believe that if you are making your wife or brother a co-applicant, their responsibilities should be understood beforehand. According to Sumit Sharma, founder of Radian Finserv, if, for some reason, a co-applicant is unable to contribute, you alone will have to take the responsibility of repaying the entire loan amount. This is why it is very important to think carefully before applying for a joint home loan. This will save you from any hassle later.