Applying for a home loan with a co-owner is surely an exciting decision and one that has many benefits. A joint home loan with a co-owner improves the home loan eligibility and makes it easier on the applicants as the burden of repaying the loan is shared. Now, before applying for this loan, there are a few things that you should be familiar with.
Go through the 5 questions you should ask a lender before applying for a joint home loan:
- What is the eligibility criteria for a joint home loan?
The home loan eligibility criteria will be based on the relationship of the applicants. Lenders permit up to 6 co-applicants for one home loan plan. Usually, the eligibility criteria for a joint home loan is the same as that of a standard home loan. It is considered best to make use of a home loan eligibility calculator in advance to ease the process of getting the loan.
- Is it possible to get a bigger loan amount?
Lenders always check the creditworthiness and income of the borrower. Since this is a joint home loan with more than one applicant involved, the joint income is going to be a bigger amount. This means that the involvement of two applicants results in the sanction of a higher loan amount. Hence, it is always advisable to check with the lender about getting a bigger amount for the home loan.
- What are the benefits of this loan?
There are several benefits of taking a joint home loan when one of the co-borrowers is a female. For instance, the stamp duty could be 1-2% lower than the standard rates charged by most state governments for women. In addition, as per Section 80C of the Income Tax Act, Rs 1.5 lakh and Rs 2 lakh can be claimed as tax deductions for principal and interest amounts respectively.
- What are the documents needed?
Here is a list of the documents required for home loan:
- Income proof (Bank statements, salary slips)
- KYC documents
- Proof of co-ownership
- Property documents
Make sure to check with the lender regarding any additional documents that they might need.
- What is the interest rate of the housing loan?
One of the most important things to focus on is the interest rate of the home loan. Getting a good interest rate is vital for the loan to be affordable. Now, if the joint home loan’s primary borrower is a female, lenders usually offer a lower interest rate. Even a small difference could make a significant impact to the total cost of the home loan.
Once you are through with these questions, also make sure to use a home loan EMI calculator to know about the loan’s monthly instalments. This will help in understanding whether to go for a particular loan plan or look for other affordable options.