Benefits of Borrowing Joint Home Loans

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A Home Loan taken jointly can significantly help in increasing the savings of a family, without straining their finances. Especially when both spouses are working, splitting the Home Loan among both individuals can be beneficial.

A Joint Home Loan is one that is taken together by two or more family members, with each applicant sharing equal responsibilities towards the payment of this loan.

Conditions for taking a Joint Home Loan

1. Only immediate family members, such as spouses, parents, children, and siblings are allowed to apply for a Home Loan jointly
2. Each applicant should have an independent source of income in the form of a salary or business
3. Both applicants should be co-owners in the property for which the loan is sought
4. The retirement age of the older person is considered while calculating the tenure of the Home Loan
5. Non-Resident Indians (NRIs) can also be co-applicant for such loans.

Points to consider before taking a Joint Home Loan

• Documents

Ensure that the documents of both the co-applicants, such as KYC, income proof, etc., are in order along with the property documents.

• Home Loan Amount

You should have a clear view of the Home Loan amount you need. You can visit the official website of any reputed lender or the ICICI Bank website, and use the free online home loan calculator available there to calculate the required amount.

• Credit Score

Banks check your CIBIL score to determine your creditworthiness before disbursing such loans. In the case of a joint application, the credit score of both applicants are checked. It means that if one applicant is low on credit, it can affect the entire loan application.

Therefore, if you are jointly applying for a Home Loan with your spouse, you should first ensure that both of you have a good credit score.

• Loan Repayment Responsibility

Timely repayment of the home loan is the collective as well as individual responsibility of all the co-applicants. The repayment can be made through a single unified EMI payment through a joint bank account.

Benefits of a Joint Home Loan

• Higher Loan Amount

It is no surprise that applying for a joint Home Loan can significantly increase the home loan eligibility amount as the income of both the applicants are clubbed to determine the loan amount.

This can be very beneficial for a married couple, where both spouses are working because:

1. The couple can buy a bigger apartment as they are likely to get a higher loan amount
2. The financial burden of loan repayment becomes easier as the Home Loan EMI is split between the spouses.

• Claiming Separate Tax Benefits

You can avail of income tax benefits on your Home Loan under Sections 24 and 80C of the Income Tax Act. In case of a joint Home Loan, each co-applicant can claim income tax benefits separately, subject to the amount each individual pays towards the payment of principal and interest amount.

• Favourable Interest Rates For Women

Sometimes a woman can get more favourable home loan interest rates than a man. Therefore, having a woman as a co-applicant for taking the joint loan for a house can help get the loan at better interest rates.

Apart from potentially increasing the avenues of savings and investments, a joint Home Loan can also create a sense of shared responsibility and belonging among couples that may help in further cementing their mutual trust and bonding.

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