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You have been planning to buy a beautiful house for your family and now you have found just the right home. However, it is more expensive than you accounted for. In that case apply for joint Home Loan. This increases your chances of getting the loan, and lets you share the repayment burden.
Joint Home Loan Eligibility
For each co-applicant, the eligibility criteria are the same as for a Home Loan taken by a single person. However, to qualify for a Joint Home Loan, the co-applicants must meet certain conditions:
Co-applicants should either be blood relations or married couple
A parent and son or daughter can apply for loan together. In that case, the son or daughter should be the main owner of the property
If a parent and two or more children apply together, the parent should be the main owner
If brothers apply for a loan together, they should both be co-owners
Generally, sisters are not approved as co-borrowers because lenders doubt their commitment to the loan after marriage
The Many Benefits of Joint Home Loans
Your combined incomes are considered when the lender decides on the loan amount to be sanctioned
You can share in the repayment
You can each get tax benefits if you are also co-owners of the home
Your tax benefit share is based on the proportion of home ownership and the proportion of your share in repayments. You can use this to your advantage:
If one of you is in the higher tax bracket, then you should draw up ownership share such that the higher tax payer has the greater share
You can also draw up a loan repayment sharing agreement where the higher taxpayer takes on higher repayment contribution
You can also have a 50:50 ownership and repayment agreement
The tax benefits
Under section 80C of the IT Act, you are each entitled to a maximum of Rs. 1.5 lakhs in deduction on the principal amount repaid for the year
Under Section 24(b), you can each claim upto Rs. 2 lakhs on the interest component of the EMI paid for the year
So, check out the lowest housing loan rates, find the best offer and apply for a joint loan. Documents required for Joint Home Loan for each co-applicant is similar to those required for normal Home Loans. When you pay the EMI, you have to pay through a joint account. Alternatively, one of you can pay your share into the other person's account. The PDC or ECS payment is done through this account.
It's better to pay through a joint account. Otherwise, you should have a clearly drawn up repayment share agreement. Also, you should pay through cheques or ECS to create a record of your contributions.
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