Nowadays, instead of taking a home loan alone, people are preferring to take a joint home loan with a family member or spouse to buy a house. The biggest reason for this is that it increases the loan amount, and tax benefits are also available to two people instead of one. If husband and wife take a loan together, not only is the burden of EMI reduced, but tax savings are also higher.
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Both have equal responsibility for the loan
Experts say that while taking a joint home loan, it is important to keep in mind that the responsibility of the loan is equal for both for the entire loan period. Banks or NBFCs check whether the vision and financial situation of both people taking the loan match or not. Correct documentation, transparency, and open communication are very important in this process.
Be careful if parents’ retirement is near
If someone is thinking of taking a joint home loan with their parents and their retirement is near, then this can be a risky step. Income decreases after retirement, which can affect the ability to repay the loan. In such a situation, you should choose a co-borrower whose future financial goals are similar to yours.
Additional benefits of taking a loan with a husband and wife
If a joint loan is taken between husband and wife, then its benefits increase manifold. Not only does the loan amount increase, but there can also be a discount in interest rates. Apart from this, the loan period can also be extended up to 20 years, which reduces the burden of EMI and makes tax planning easier. If the co-borrower has a strong credit history, then the total interest cost is reduced even more.
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Better interest rate and savings in EMI
Many banks and financial institutions also offer special discounts on joint loans. If the loan is taken with the spouse or parents and their CIBIL score is good, then the cost of the loan can be reduced significantly. This is considered a smart move in the long run as it makes buying a house not only easier but also cheaper.