After living in hostels for a long time, Sumit finally decided to purchase his own house after marriage. He had always dreamt of moving into a bungalow with enough space for all his family members. However, he knew that his salary might not be enough for such a dream. Thankfully, his wife, a commerce graduate, persuaded him to avail a home loan. At the bank, they were apprised about joint home loans and their benefits.
With a wish to purchase a dream home, many couples are opting for joint home loans today. If you too are looking forward to buying a house, here are the benefits of a joint home loan you must know about.
- Higher loan amount
When you apply for a joint home loan, lenders combine the eligibility of both the applicants, which enhances the chances of approval. Higher home loan eligibility can help you get a higher loan amount and an even higher loan to value ratio. Having co-applicants reduces the chances of default and risk for the lender.
- Tax benefits
With a joint loan, you and your spouse can avail tax deductions from your income separately. You can both avail tax deductions on interest repayment of up to Rs 2 lakh under section 24(b) and on principal repayment of up to Rs 1.5 lakh under section 80C of the Income Tax Act 1961.
- Lower interest rates
As an encouragement to invest in house properties, many lenders offer concessional interest rates to women. Therefore, availing a joint home loan can help you get one of the lowest home loan interest rates. Moreover, there is concessional stamp duty for women homeowners in many Indian states. Availing a joint loan with your spouse can help you save on the stamp duty and registration cost too.
- Sharing of responsibility
Availing a housing loan with a salaried spouse can help reduce your financial responsibility. Your spouse will share the burden of the loan and contribute to the EMI payments. Taking a joint loan also helps in succession and smooth transfer of property in case of the demise of a co-owner, as the survivor becomes the owner automatically. Moreover, as the repayment is shared by the couple, the approval gets easier.
As discussed above, it could be beneficial for you to take a joint home loan with your spouse. However, you must also note the risks involved in the same. If you both decide to part ways, it could be tricky to manage the loan. You might not be able to convert it into a single loan if either of the two fails to meet the eligibility criteria. Similarly, if your partner is unable to pay the EMI or passes away, the responsibility of the entire repayment will fall on you. Therefore, ensure to weigh all the factors before you apply for home loan with your spouse.
