When two or more applicants apply for a home loan together, it is known as a joint home loan. Joint loans offer many advantages; enhanced loan eligibility, better tax planning, increased chances of getting a loan sanctioned are just few of them. However it is important to remember that these loans are sanctioned based on a few parameters as laid down by the lender; some may be similar when a single applicant applies for a house loan while some may be additional for a joint loan.
Joint Home Loans Eligibility Criterion:
Here we discuss the conditions that need to be fulfilled when applicants apply for a home loan in case they want to get a house loan sanctioned. Minimum of two and maximum of six people can apply for a home loan jointly. Each applicant needs to fill the loan application form individually and provide all documents as per the basic KYC guidelines.
Combinations allowed for joint loan: It is important to remember that any two or more random people cannot apply for a loan together, there are certain rules laid down about who can be co-applicants. Husband and wife can apply for a joint loan without any hitch, however when it comes to siblings and parents then certain rules apply. Brother sister combination, married daughter with parents and friends are not acceptable combinations. An unmarried daughter or son can apply with a parent for a joint loan subject to certain conditions regarding property ownership. A married daughter is not allowed to take joint house loan with a parent.
Credit rating for joint home loan: Lenders will pull out the CIBIL Report for all applicants when a loan is applied for. If both applicants have a good score then there is no reason to worry; however if one of them has a low score then the person with the better score should become the primary applicant. As long as the primary applicant is paying the major share of the loan EMI his credit score is given more importance. However if both have a low score then things could get difficult for them. Joint loans can help a person with low score secure a loan if he/she applies with a person with a better score.
Rules regarding ownership: Co-borrowers are two or more people who apply for a joint loan together while co-owners are people who own the property that is being bought with the loan. If a father and son apply for a house loan then in case the son is an only son then either can be a primary owner and the property is registered in both their names. If there is more than one son then the father cannot be the primary owner. The same rule applies to mother son combination too. If an unmarried daughter applies with a parent for a home loan then the house has to be registered in the name of the daughter only. All co-applicants whether they are co-borrowers or not are equally responsible for timely loan repayment.
Income Eligibility: If one is seeking to get a bigger loan then they should opt for a joint loan as if more than one applicant is working then their income will also be considered when sanctioning a house loan. Clubbing of incomes increases the loan eligibility. If one chooses to apply with their spouse or parent for a joint loan and they are not working then the loan eligibility will not go up. If an unmarried daughter applies for a joint loan with her parent/s then the parent’s income is not considered for calculating the loan eligibility even if they are working. You can easy check the enhanced eligibility by visiting ICICI Bank home loan or SBI home loan link. If income of more than one applicant is being considered for calculating the loan eligibility then the income proof and taxation documents for all applicants (whose income is being considered) need to be submitted. Tax benefits are available to all applicants bearing the EMI burden.
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