Joint Home Loan

While taking a joint home loan is an excellent way of increasing your budget, there are some conditions you have to fulfil to be eligible for it. The essential thing is to understand who you can get as a co-applicant. Only a family member can be your co-applicant. This includes your parents, spouse, siblings, and children. The maximum number of co-applicants is 6. Some lenders also have a condition of co-applicants being co-owners of the property you intend to buy. 

Benefits of taking a Joint Home Loan

Taking a joint home loan has many advantages. They are listed below 

• A joint home loan makes you eligible for a higher loan amount. This is because the lender combines the income of the co-applicants and offers a loan amount as per the repayment capacity of all applicants.

• All the applicants share equal responsibility for the loan. Therefore, the bank has less risk involved. 

• Many lenders also offer a lower interest rate for women. 

• The tax benefits are also significant for joint home loans. 

• The burden for loan repayment is less.

Documents Required for Joint Home Loan

All the applicants for the joint home loan have to submit the documents. The following documents are required for a joint home loan -

• KYC documents

• Address proof: Utility Bills, Passport, Rent Agreement

• Identity proof: PAN card, Passport, Voter’s ID Card, Driving License

• Property documents

• Income proof: Salary slips of Form 16

• Proof of co-ownership

Why Take Joint Home Loan

There are many benefits of taking a joint home loan instead of taking a home loan just by yourself. First and foremost is the benefit of getting a higher loan amount. If you want to purchase a large home, you need a huge loan amount. The lender is more likely to approve your loan amount in case of a joint home loan application. Second, your eligibility for the home loan also increases. The tax benefits are also greater in the case of a joint home loan.

Tax Benefit on Joint Home Loan

In India, tax benefits are offered on two components of the home loan - interest repayment and principal amount. Every co-applicant is eligible for taking these tax benefits. 

• Under Section 80C: All the applicants can claim a deduction on the principal amount repayment under section 80C of the income tax act. The maximum amount of deduction available is Rs 1.5 lakhs individually. However, the total amount claimed cannot exceed the principal amount repaid to the bank.

• On Interest Payment: Under section 24, all the applicants can claim a deduction of the maximum amount of Rs 2 lakh on interest repayment. Therefore, the total interest deduction claimed is Rs 4 lakh. However, the total amount claimed cannot exceed the interest amount repaid to the bank.

Joint Home Loan with Working Spouse/ Parents

The best situation for taking a joint home loan is with a working spouse. You can pool your incomes together and apply for a higher home loan. This way, you will have the support of your spouse for repayment, and both of you will get double tax benefits.

Adding your parents as a co-applicant is also a possibility. However, in this case, tenure is an important consideration. If your parents are nearing retirement age, the lender might be reluctant to give you a longer tenure. 

Joint Home Loan with Non-Working Spouse/Parents

Taking a joint loan with a non-working spouse will not benefit you in tax savings and loan amount. The same is the case with taking a joint loan with non-working parents. However, if you take a joint loan with your non-working wife or non-working mother, you might benefit from lower stamp duty and lower interest rates. Many lenders offer lower interest rates for women borrowers.