I am sure owning a dream home is on the bucket list of May. But with a fixed salary and increasing inflation it seems like a distant dream. Buying a house is one of life’s biggest milestones and it takes years to save that much amount.
Thanks to an excellent home loan scheme, the dream doesn’t seem far enough anymore. You can get the money when you want to buy the home and can repay through EMIs every month. It’s just like reverse saving.
But here’s the catch, home loans are generally of high value and for longer duration, due to which the banks ensure strict due diligence before granting a loan as a result a lot of people get screened out.
Well, then what is the solution?
Try a Joint Home Loan.
Here’s everything you need to know about joint home loans:
What is a Joint Home Loan?
A joint home loan is when 2 or more people jointly apply for a loan for a single property. When 2 people jointly apply for a home loan, they collectively agree to undertake the responsibility of loan repayment.
For example, you and your spouse are planning to buy a new home, you both can jointly apply for a loan in respect of your dream home and repay the same together.
Some banks insist that the co-borrower should also be a co-owner of the property. However, this requirement differs from bank to bank as some banks approve joint home loans even if the co-borrower is not the co-owner of the property.
Why Joint Home Loan?
A joint Home Loan provides a solution to the limitations inflicted by an Individual Home Loan.
Let’s have a look at its advantages.
- Attractive Interest Rates
Most home loans provide concessional rates to women beneficiaries. So, if in the joint application, one of the applicants is a woman, you can get better interest rates than you would get for an individual home loan.
- Speedy Processing
Since there are two or more people applying for the same loan, the repayment assurance increases. As even if one person defaults or is no longer available to repay the loan, the other person can. Therefore, the joint home loans are processed faster as compared to the individual home loan applications.
- Flexible Repayments
In joint home loans, since there are two or more people who will be repaying the loan, the banks usually give flexible repayment option.
- Tax benefit
The IT Act allows a deduction in respect of the principal amount and the interest amount as well. The principal repayment is allowed as a deduction under section 80C and the interest repayment is allowed as a deduction under section 80EE. Thus, by applying for the joint home loan, both the applicants can take advantage of the deduction in their respective tax calculations, which in turn helps in saving more.
Thus, looking at the varied benefits of joint home loan, it is recommended that if you are planning to buy a home, opt for joint home loan.
