Thinking Of Availing A Joint Home Loan? 6 Facts That You Should Know
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Following are the 6 most important facts of joint home loans:
1. Co-applicants’ definition: This is the most common question one asks. A co-applicant is the person who jointly takes a loan along with you. It is important to understand the difference between a co-applicant and a co-owner. A co-owner includes all the owners of the property. Banks insist all the co-owners be co-applicants necessarily. Hence, all co-applicants may not be co-owners, but all co-owners have to necessarily be co-applicants. A co-applicant can be your spouse, parents, siblings or son.
2. Paperwork: In case of a joint home loan, both applicants are required to submit all documents necessary for processing the loan such as, Permanent Account Number (PAN) card copy, address proof, income proof, bank statements and documents relating to the property.
3. Increase in loan eligibility: This is one of the biggest benefits of joint home loan. The lenders will consider income of all the applicants, and thereby, increase the loan eligibility value.
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5. Tax benefits: Now, when you are equally responsible for repaying the loan, it is logical that you get to enjoy the tax benefits as well. Under section 80C of Income Tax Act (IT-Act), a home loan borrower is eligible for tax benefit of principal repayment of up to Rs 1 lakh and Rs 1.5 lakh of interest repayment under section 24 of the same act. In case of a joint home loan, both the applicants can enjoy these benefits proportionate to the extent of contribution towards repayment.
6.
It is important to understand that joint home loans do come with a great deal of benefits along with proportionate liabilities. So if you want to enhance your loan eligibility, approach your blood relatives, but make sure you have a clear strategy to repay back the higher loan amount on time.
Image: thinkstock
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About the author: Rajiv Raj is the director and co-founder ofwww.creditvidya.com.Advertisement
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