One of the most important purchases that you’ll make in your lifetime is a home. That goes doubly so if you’re married. You and your significant other will think long and hard before you decide to go out and purchase a home.
But before you go to the bank and apply for your loan, you should probably be aware of some things that you can do to enhance loan eligibility, and in the process, claim a few benefits. This is done mainly by applying for a joint home loan. Here are some of the advantages of applying for a joint home loan.
You Don’t have to Pay it all Yourself
One of the biggest things about applying for a home loan is the fact that you’ll have to pay off the entire sum yourself.
This can be difficult, especially in cases when you lose your job. A joint home loan helps ease that burden by making both you and your partner as co-owners to the home.
Being joint applicants, you can pay the payments together, ensuring that neither person is stuck with a huge amount to pay off.
If one of you finds themselves without a job, the other person can take over the payments until the other can get back on their feet. This is a level of safety that can be highly attractive.
You can Claim Tax Benefits as Well
If you want to claim tax benefits, there is a condition. Both of you must be co-owners on the house. If that’s satisfied, you can claim your benefits on both the interest you’re paying off on the loan, as well as the principal that you initially took out.
By Section 80C, each of you can claim a maximum of 1.5 lakh in tax benefits on your home loan payments.
Although this may not seem like much, it can certainly add up to a lot of savings over time.
What are the Steps to Applying for a Joint Home Loan?
Before you think about applying for a joint home loan, you must be sure that the person you’re applying with can qualify for joint home ownership.
Typically, your spouse is qualified to be a joint home loan applicant. Family members such as brothers, sisters, and parents, can also qualify to be an applicant.
Through this, you can claim tax benefits as well.
The home loan procedure is relatively straightforward after that. Approach the bank that you want to apply for, and tell them that you’re planning to purchase a house together.
They will request the necessary home loan documents
from both of you. You will also need to show that you have collateral, either by other property, or a stable job that you can use to convince them. After you’ve submitted the documents, a credit check and background check will be done on both of you to see if you qualify for the loan, as well as the interest rate that you can receive.
If all that is done successfully, you will receive an approval from the bank sanctioning the loan. You can purchase the house after that.
Home ownership is something most of us dream of, and if you have someone to share the burden of paying off the loan, the process becomes that much easier. With these kinds of facilities available, the once-arduous task of home ownership, has now become that much more pleasurable.
Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India. Currently based in Pune, Arwind Sharma is a name to reckon with when it comes to financial management for big brands. A post-graduate in business economics, he is an alumni of Princeton University, USA. During his free time, Arwind teaches children from marginalised sections of society and also work on his blog.