The 16th century British rhyme “One for sorrow, two for joy…” is almost true for the Indian home loan structures. While an application by a lone person may not necessarily cause sorrow to the borrower, a joint application can surely of be advantage compared to the application by a single person. Let’s find out how.
Property prices are rising fast and a single applicant might not be advisable. The best option is to seek a loan through a joint application with your spouse as the co-borrower. Dual-income households are very common in India right now and it makes sense to apply jointly with your spouse (assuming he/she is working and earning). A joint home loan easily increases the amount of loans that you can apply for. Furthermore, in case your credit score is not optimal – 750 and above – a joint application can help you seal a deal relatively easily.
Who can be the co-borrower in a home loan
The selection of a co-borrower has to be done prudently. If your spouse has a stable income, he/she can certainly add muscle to the loan application. Else, even a close relative will suffice in this regard – experts advise to include parents or children or brothers/sisters. However, friends and distant relatives are not advisable as co-borrowers in home loans for obvious reasons. There is another important criterion that you must check – the creditworthiness of the co-borrower. If the applicant’s credit score is not particularly good, then a co-borrower with a good score can do a lot of good both in terms of the amount of loan and on the rate of interest that can be secured in the deal.
“A co-borrower can enhance your loan eligibility. However, if they have a poor credit profile, it might be wiser to apply without them. When selecting a co-borrower, make sure to evaluate their income, credit score, repayment capacity, and their willingness to be part of your home loan process,” Adhil Shetty, CEO of Bankbazaar.com was quoted in the media as saying.
Can a co-borrower claim home loan interest income tax benefits
A significant benefit for the co-borrower is that he/she can get income tax benefits after taking a home loan. According to the Income Tax Act, both the joint owners can claim tax deductions of up to Rs 2 lakh under Section 24 of the legislation. This deduction is on the interest paid on the home loan for every financial year till the loan is liquidated.
Buying a home is one of the most important targets for most of us. The prudent ones begin investing from a young age to buy a home when they reach their late thirties or early forties. But for most taking a home loan is unavoidable for more than one reason. Did you know the advantages of an application for a joint loan? Read on. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
