It’s referred to as a shared house loan when you take out a mortgage with someone else. People frequently take up a shared mortgage with their spouse or siblings. A combined house loan might be taken if a person is unable to repay the entire loan amount on his own.
Benefits of Joint Home Loan
- If your partner has an excellent credit score and your combined salary is sufficient to meet the EMIs, you may be able to receive a bigger house loan.
- Both people can claim an income tax advantage under section 80C if they have a combined house loan. It is necessary for both of them to be co-honors in order for this to happen.
- Both can benefit from interest savings of Rs 2 lakh and principal savings of Rs 5 lakh.
Disadvantages of Joint Home Loan
- Your credit score will be affected if your co-applicant is unable to pay the EMI.
- The joint applicant has a good chance of securing the loan, but this is not a guarantee. The reason for this is that banks are particularly hazardous when it comes to house loans.
Keep these suggestions in mind
- Your application may be refused if your co-applicant does not have a decent credit score.
- Lenders will only approve a Joint Home Loan if both the principal and co-applicants have a strong repayment history.
- Often, the lender will not reject your application outright, but will instead offer you a loan with a higher interest rate. You and the co-applicant should not have a debt-to-income ratio of more than 50-60%.
Co-applicant who is a woman
- Many lenders keep the interest rate on house loans for female borrowers low.
- This rate is approximately 5% (5 basis points) lower than the standard home loan rate.
- If a woman is a co-applicant on a home loan, the benefit of a lower interest rate is only accessible if the woman is the joint home loan’s first applicant. Alternatively, the woman should be the sole or joint owner of the property.
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