Joint home loans are chosen over regular housing loans, owing to several advantages such as a greater amount of funds, better chances of approval, lesser repayment burden, and so on. Housing loans availed jointly is a significant financial commitment both for you and your co-applicant. Thus, it is necessary for both the applicants to perform extensive research regarding the ins and outs of a joint housing loan, including the several myths related to it.
Applicants often have several doubts related to tax benefits on a joint home loan, its mechanism, policy terms, obligations, etc. While some of these are meant to be clarified by the officials of the lending institution, the others need to be studied in detail to be understood properly.
List of the different myths surrounding joint home loans
Every borrower must make an informed decision while borrowing a housing loan, and not get misled by the myths. Have a look at these six misleading myths about joint housing loans-
- Signature of the co-applicant merely being a formality
It is a common misconception that the role of a co-applicant is just a formality. This is, however, not true. The responsibility of repaying a loan is equal for both applicants. They can use an EMI calculator to pre-determine and divide the monthly payment liabilities amongst them. The primary borrower, along with the co-borrower, has equal participation in availing and repaying a home loan jointly.
- Handing over property documents during loan closure
Many think that a co-applicant has no role during loan closure formalities. This is, however, untrue. Most financial institutions require a NOC from your co-applicant to release the original documents during loan closure.
- Co-borrower and not co-owners can claim tax benefits
When it comes to tax benefits on a joint home loan, customers often think that only one applicant is entitled to tax deductions. The truth is, both the borrowers are equally entitled to the tax benefits under Section 24(b). The only condition in such cases is that the co-borrower also has to be a co-owner of the property.
- Including an eligible co-applicant guarantees home loan approval
It is true that availing a housing loan is easier when applied jointly, as compared to applying individually. Yet, this does not guarantee the approval of the home loan. Both the applicants must contribute positively to the creditworthiness. Only then will the lender be convinced to sanction the loan.
- Co-applicant being a non-working individual or housewife enhances loan eligibility
This is mostly untrue. Home loan eligibility has greater chances to increase when the co-applicant is a working individual. Having a non-working individual or a housewife as co-applicant usually has no impact on joint home loan eligibility.
There are also a few misconceptions related to how your credit score gets affected when you apply for a joint home loan.
The first and foremost way to put the misleading ideas to rest is to discuss them with the lender. As such, financial institutions, which provide efficient customer service, can help you better. This is why you need to select an ideal lender who not only charges an affordable home loan interest rate but also assists you from the very beginning until the closure of a loan.
Individuals planning to avail a housing loan can also use the home loan eligibility calculator to get the proper estimates of how much he/she can borrow. The estimates help an individual to plan a home loan better.
The various myths concerning housing loans, if not clarified on time, can lead to a number of wrong decisions. Going through a complete guide on joint home loan benefits, its pros, cons, and intricacies can help put all the relevant misconceptions to rest.