Owning a home is a lifetime achievement for many. But purchasing a home or planning to build it from scratch requires massive investment. Here comes the importance of opting for a home loan.
Opting for a home loan with a co-applicant is not necessary but there are several benefits of taking a home loan jointly. A joint home loan reduces financial burden and makes the investment journey smoother. Interested borrowers can read on to learn about what is a joint home loan, the pros and cons, how to apply, and more.
What is a joint home loan?
Joint home loans, also termed co-borrowed loans, allow two or more individuals to opt for joint home loan together and share financial responsibility. As the repayment amount gets shared between the two, lenders are likely to approve a higher loan amount.
While applying for the loan, one can include any immediate family member such as a spouse, parent, sibling, son, or unmarried daughter as a co-borrower. Many borrowers consider opting for a home loan jointly, but they should be aware of the pros and cons.
Pros of taking a joint home loan
Here are some joint home loan benefits:
Higher loan amount: A joint home loan application considers the salary of the co-applicant. The lender approves a high loan amount if the combined income is more than expected. Thus, individuals can build their dream homes because of the increase in budget.
Lower rates of interest: Rates of interest are negotiable with the lender as both the monthly income and repayment ability are enhanced in a joint home loan. Additionally, the lender offers low interest rates specifically to women borrowers who are co-owners of the property.
Repayment flexibility: Both co-applicants don't need to contribute an equal loan repayment amount. Thus, the EMI amount weighs jointly.
Tax benefits: A joint home loan offers tax benefits for the interest and principal amount. Under Sections 24 and 80C of the Income Tax Act, joint owners can enjoy double benefits and savings.
Cons of taking a joint home loan
The cons of joint home loans are as follows:
Shared responsibility: Both borrowers are equally responsible for loan repayment. Thus, if one borrower fails to repay the loan amount on time, the other borrower will be responsible.
Impact on credit score: The issued loan amount will impact the credit score of both borrowers. If one of them defaults, it will be difficult for both applicants to apply for loans in future.
Dependence on co-borrower: Whether the loan amount will be repaid on time depends on the financial stability of the co-borrower.
Risk of disputes: Disputes might arise regarding the loan repayment schedule, which can be difficult to solve.
How to apply for a joint home loan?
Applying for a joint home loan is an easy and hassle-free process. Here is a detailed step-by-step guide on how to apply and avail a joint home loan application process:
Step 1: Visit the official website and choose the home loan application form.
Step 2: Provide detailed information on the home loan amount with full name, type of employment, mobile number, income, and PIN code.
Step 3: Enter the 3-digit OTP received on your mobile to complete the application process.
Upon successful verification of the information entered, the representative gets in touch within the next 24 hours to proceed with the next steps.
Many financial institutions provide pre-approved offers to existing customers to avail a faster credit application process. This offer is available on products such as home loans and loan against property. Interested individuals can go to the official website and check pre-approved offers entering necessary information such as name, contact details, email address, and so on.
To conclude, it is essential to emphasise the pros and cons of applying for a joint home loan. If a co-applicant has a good credit score, it raises approval chances of a high loan amount. Most importantly, one needs to find out the best financial institution offering the best deals that suit their needs and preferences.
No comments:
Post a Comment