Joining a co-applicant in a home loan!

Are you aiming to avail a home loan? Will you like to relish substantial profits from it? Here’s your answer – joining hands for a bigger home loan. You can instantly apply for joint home loan by simply adding a co-applicant or co-borrower in your application of home loan. Let’s explore some terms about these loans which banks specify when co-applicants are added.

Loan eligibility

All banks allow two or more persons to jointly apply for a home loan. By applying along with a co-applicant, your eligibility increases and as a result, you can avail a higher loan amount. However, banks specify that only people with certain specified relationships like father and son, husband and wife, brothers are permitted to apply as co-applicants. Beyond these, other relationships are not permitted as co-applicants. Moreover, the co-applicant needs to have a regular source of income.

Between a co-owner and co-applicant

Co-applicant is a person who applies along with the borrower for a loan. A co-borrower along with the primary borrower accepts responsibility for repaying a debt. Infact, from a bank perspective, co-owners of a property should necessarily be co-applicants.

Husband and wife

One can include one’s spouse as a co-applicant for a home loan. His or her income will be added for determining the loan eligibility. The maximum tenure of the loan is determined based on the retirement age of the older partner. As per bank aspects, this is an ideal situation to have the husband/wife as co-applicant.

Father and son

The terms relevant to a father and son being co-applicants are thoroughly clear, if the applicant is the only son, he can jointly apply with his father with both the incomes being considered. The property should be in their names jointly and it does not matter who the main owner is. This is because in any case the son is the legal heir of the father’s property.

In case a person has two or more sons and if he wants to apply jointly with one of them, he should not be the main owner of the property. This is because, on his death, his children should inherit the property jointly and may cause an inheritance dispute. The father may only be taken as co-applicant and his income may be considered for the loan. He may be a co-owner or not own the property at all.

Unmarried daughter and father

An unmarried daughter can apply jointly with her father. However, the property should only be in the name of the daughter and the income of the father should not be considered. This is to avoid any legal complications on the subsequent marriage of the applicant.

Brothers and sisters

An applicant may apply with his brother provided they are currently staying together, and intend to do so in the new property as well. However, a brother cannot apply with his sister. Also, an applicant cannot have her sister as a co-applicant.

Documents

The documents needed for joint home loans are the same as any other home loan. The only difference is that here documents are needed from both applicant and co-applicant. General home loan documents needed are identity proof, address proof, salary slips and bank statements.

Taxation benefits

We all use home loans to save tax. Joint home loan tax benefits are an extension to the tax exemptions provided by home loans. In the case of joint home loans, applicant as well as co-applicant can enjoy tax benefit for the contributions towards the loan.

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Source-secondary