Home loans are secured and convenient loans as one can repay the loan over a period of time, through the EMI option. They are generally big ticket size loans and many individuals prefer taking a joint home loan. Having said that, it is also mandatory for most banks to have a co-applicant for a home loan, whereas some insist on the co-owner also being the co-applicant. This, however, does not necessarily mean that the co-applicant has to be the co-owner. While a co-owner of property shares the property with someone else, a co-applicant is liable for repaying the loan, in case the primary applicant is unable to service it.
Hence, taking a joint home loan comes with its own benefits and perks. For instance, the applicant gets approval for a bigger loan amount in case of a joint home loan and even gets concession at times.
If you opt for an individual loan, you will be offered a loan limit which will be much lower as compared to a joint loan with your spouse. For example, if individually you are eligible for a loan of Rs 40 lakh, your loan amount could go up to Rs 60 to Rs 70 lakh if combined with the spouse’s limit. With such an increased loan amount you could opt to get a bigger house.
Along with that, you also get additional concessions on your home loan. If the wife is the primary applicant for the home loan, you can get the loan at a cheaper rate, as most banks offer lower interest rates to women applicants. Other charges such as the stamp duty fee needed for registration of the house are also comparatively lower for women but vary from state to state.
You can also enjoy increased tax benefits. Many individuals opt for a joint loan just to avail tax benefits. You get to avail higher tax concession, with a joint home loan. For instance, both the spouses separately enjoy the Section 80C tax benefit of Rs 1.5 lakh on the principal amount. Hence, with a joint home loan, you get an enhanced tax benefit and the limit is increased to Rs 3 lakh jointly, under section 80C. Also, on interest paid for a self-occupied house under Section 24, the deduction of Rs 2 lakh gets increased to Rs 4 lakh, in the case of a joint home loan.
