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    Home Why take a joint home loan?
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    Why take a joint home loan?

    InvestPolicyBy InvestPolicyDecember 7, 2019Updated:November 26, 2021No Comments4 Mins Read
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    If you are thinking of buying a home by taking a loan, then it would be beneficial to take a home loan jointly with your spouse instead of taking a loan in the name of one. If you take a home loan jointly, then there is no pressure of EMI and also saving tax. So through this article, we are going to tell you about the advantages of taking home loan jointly.

    Why take a joint home loan?

    Banks do not insist on a co-applicant while sanctioning a home loan, but if you apply jointly with someone and take a loan, it only benefits you. There are many people in the country who have made a lot of profit by taking home loans jointly. When taking a joint loan, the burden of repaying the home loan is divided into two people, which makes it easier. There are several advantages of taking a home loan jointly, some of which are –

    Increases chances of loan approval

    If your income is low, credit score is also not good and you already have a loan that you are repaying, then it can be difficult to get a home loan. But if you apply for a home loan jointly, the eligibility and chances of getting the loan increases. If your partner has a good income, a good credit score and a strong repayment capacity, a home loan is easily approved. Lenders look at the combined repayment capacity when approving a home loan.

    tax benefit

    When you have taken a home loan, you get a tax benefit of up to Rs 1.5 lakh annually under Section 80C of the Income Tax Act while repaying its principal amount. While availing a home loan on his own property, he gets tax benefits of up to Rs 2 lakh annually under Section 24. If you take a home loan jointly, both you and your partner can get tax benefits individually. Each co-applicant gets a tax benefit on the home loan in the same proportion as they contribute to repay the loan principal and interest. That is, the tax benefit you get depends on what proportion you and your partner repay the home loan.

    Concession is available on interest rate for women being co-applicants

    If you apply for a home loan with a female co-applicant, you can get a home loan at discounted interest rates. Women get home loans at 0.05% lower interest rate than men. But to get concession on the interest rate of home loan, the female applicant must be a co-applicant and a co-owner of the property.

    Stamp duty is charged less than women

    It makes sense to register the property in your wife’s name. Stamp Duty Fees are reduced on purchase of property in the name of a woman or jointly with her. The stamp duty may vary from state to state, while some states charge 1-2% less stamp duty than women. You can claim tax deduction of up to Rs 1.5 lakh per year under Section 80C on stamp duty and registration fee. This deduction can be claimed only in the year you purchased the property and paid stamp duty and registered the property.

    Keep in mind when taking home loans jointly

    • Co-applicants availing of home loans have an individual and collective responsibility to repay the home loan. You can repay the home loan either way. You can pay this either through separate EMIs or through a joint bank account.
    • For quick approval of a home loan, the documents required for home loan such as KYC (address and identity proof) and property documents are required. With this, income certificates of all co-applicants are also required, as it is seen by the bank through your income before you approve the loan whether you are able to repay the loan or not.

    Benefits of taking home loans jointly

    There are many types of benefits when taking a home loan jointly, some of them are –

    • Applying for a home loan jointly increases your eligibility for a home loan, because the salary of two people is definitely better than one.
    • By applying jointly, you can get a higher loan amount and you can buy a bigger house. If you have a large family, a big house is good.
    • Due to the higher amount sanctioned, you can buy a house in a major place of the city.
    • Both people can take advantage of tax deduction when taking home loan jointly and this also shares the burden of repayment.
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