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Things To Know Before Availing A Joint Home Loan


Sometimes, taking a joint home loan with a trusted co-applicant can be more beneficial than solely applying for a home loan. However, you must be mindful of certain things before applying for a home loan jointly.

Buying a home can be a priority for many people for various reasons. Apart from the contentment of residing in a place of your own, a home can be a great asset that can witness value appreciation in the future, depending on the location and other factors. Besides, buying your own home frees you from worrying about lease agreements or rent prices.

Therefore, many people prefer to take a home loan to purchase their dream home. A home loan provides the benefit of owning a home without waiting for years to pile up your savings to be able to buy one. However, rising property prices, inadequate income, or unavailability of a down payment fund can restrict your capability of taking a home

Thankfully, you can consider taking a joint loan for a house with a co-applicant to increase your chances of getting an adequate amount of home loan from your lender. For example, a joint home loan with wife or husband can reduce  an individual’s loan repayment burden. Moreover, a lender can sanction a higher joint loan for a house if both applicants work and earn well.

But you should consider some crucial points discussed below before choosing the home loan joint applicant you want to go with.

1. Select the Right Co-Applicant

You can apply for a joint home loan with your spouse, parents, or siblings. However, you must carefully choose your co-borrower based on various factors. For instance, weigh the possibility of a dispute arising in the future and how it may affect the loan repayment.

2. Examine Co-Applicant’s Eligibility

If a co-applicant fails to pay the loan EMI, then the responsibility of repaying the joint home loan shifts to the remaining co-applicant automatically. So, checking your co-applicant’s eligibility is crucial before making a joint application for a home loan. Your joint home loan eligibility can significantly improve if your potential co-applicant has a good credit score.

For instance, if you’re considering a joint home loan with your wife, then check whether she has a good credit profile, income, and repayment capacity. Additionally, assess the commitment level of your home loan joint applicant before you consider making a joint application for a home loan with any individual.

Moreover, with some lenders like Tata Capital, up to 6 individuals can apply for a joint home loan together. If your home loan has more than one co-applicant, then check the joint home loan eligibility of each applicant before applying.

3. Ensure the Availability of Documents

All co-applicants are required to furnish documents related to the home loan. This can include Aadhaar and Pan details, income proofs, property documents, etc. So, ensure all your co-applicants have their documents ready to avoid last-minute hassles.

4. Claim Income Tax Deductions

All co-applicants of a home loan can claim income tax deductions individually under the following sections of the Income Tax Act 1961.

  • Section 80C-Maximum deduction of ₹1.5 Lakh on principal repayment.
  • Section 24B- Maximum deduction of ₹2 Lakhs on home loan interest.

Additionally, many other tax deductions are available for co-borrowers. However, every co-applicant should be the co-owner of the property bought on that loan.

So, a joint home loan with wife or husband enables both spouses to claim income tax deductions separately.

5. Consider Term Insurance

A home loan repayment tenure can last long, depending on the loan and the EMI amount. If any co-borrower passes away during the repayment tenure, then the living co-borrower must bear the full burden of the remaining EMIs.

Therefore, each home loan joint applicant should consider taking a term plan so that the personal finance of the surviving co-borrower should not get affected after any unfortunate incident.

A joint home loan has many advantages and benefits if you’ve done your homework right. With housing finance companies like Tata Capital offering affordable home loan interest rates, the time is right to secure a joint home loan and upgrade your status from being a potential home buyer to a proud homeowner.

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