Joint home loan
Joint loan is a great product in the home loan market. If both husband and wife are working, then the decision to take a joint home loan is quite sensible. Both can contribute equally to repay EMI. Joint home loan is in great demand these days due to many benefits attached. Not only this, even if a person wants to take the property on his own name, banks insist on taking a joint home loan. You must be thinking what will happen if the wife is not earning or is a housewife? You will be surprised to know that even in this case banks are ready to give joint home loans in the name of both partners. Let us tell you what are the advantages and disadvantages of taking a joint home loan.
Benefits of taking a joint home loan
Large amount of home loan
If the loan amount is approved in the name of one person, then the amount of joint home loan will always be higher. This is because by joining a co-customer, your eligibility increases and as a result, you become capable of taking more loan as a couple. Not only this, if you are not even eligible to take a home loan, then by adding a co-applicant, you become eligible to take a home loan.
Understand this by example
Rohan applied for a home loan of Rs 30 lakh. His annual income is Rs 7 lakh and according to the bank, he is eligible to take a loan of only Rs 20 lakh. But 20 lakh rupees is not enough for the house he wants to take. In such a situation, he has only two options – first either he takes the heart out of taking home loan or second he should look for a house in the range of 20 lakh rupees. But he also has the best option – to make his wife as a co-owner. By doing this, his eligibility will increase and both will get a home loan of Rs 30 lakh.
You may be aware of this that there is also a tax rebate for a home loan. These tax exemptions are given under section 80C of the Income Tax Act and section 24 on payment of interest for payment of principal. But through joint home loan you can save even more. It is possible by adding your spouse as a co-owner in a home loan. When you do this, you and your wife can enjoy different tax rebates. Therefore, both can save tax of Rs 1.5-1.5 lakh under 80C and Rs 2-2 lakh under section 24. This will double your tax savings.
Interest rate discount
Most banks offer discounted interest rates for women home loan customers. Therefore, to take advantage of this, you can make your wife a primary applicant and yourself a secondary applicant. By doing this, you can get a home loan at lower interest rates than others.
Disadvantages of taking a joint home loan
If the customer is unable to pay the EMI of the home loan, in this case the credit score of both the applicants will be affected and there may be difficulties in getting the loan in future.
In case of divorce
If the husband and wife are separated and a divorce petition has been filed, then there can be a fight for the ownership of the property.
In case of death
If the main applicant dies, then the entire burden of EMI will come on the head of the other applicant and if he is not doing a job somewhere then it can be a big problem for him.