How do Lenders Determine the Eligibility for Both Applicants under Joint Home Loan?

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Your home is the little paradise that you share with your loved ones. It holds paramount importance for everyone, and for many it is a once-in-a-lifetime investment. Although we want to invest in a house that is bigger and better, affordability is a significant concern that determines the size, location and kind of home you can buy.

Thankfully, owning a house of your dream has become much easier these days with the easy availability of home loans at attractive interest rates. Home loans offered by various banks and non-banking financial institutions have improved affordability to a great extent.

However, the amount of home loans you can avail largely depends on your eligibility, which is determined by various factors such as your age, income level, other existing loan repayments, etc. Lending institutions follow prudent norms, which state that your total home loan EMIs (including existing repayments and proposed EMIs) cannot exceed beyond a certain level. This condition puts additional restrictions on borrowers about the amount of loan they can borrow.

However, you can improve your home loan eligibility by adding a co-applicant (who is an earning member with an independent source of income) to your loan. This means, instead of opting for an individual home loan, you can consider a joint home loan. A joint home loan can allow you to avail a higher mortgage, as the income of the co-borrower will also be considered by the lender while assessing your repayment capacity.

joint home loan

Apart from increasing your home loan eligibility, there are many additional benefits of adding a co-applicant to your home loan. Sharing loan repayments with a co-applicant helps you reduce your debt burden. It lets you buy a bigger and better house in your preferred location. Furthermore, it allows you to extract maximum benefits offered by the Income Tax Act. All the applicants can claim a deduction for principal repayment under Section 80C and interest payment under Section 24 of the Income Tax Act.

Who is Eligible to be a Co-applicant?

A co-applicant can be an immediate family member like your spouse, children, parents or siblings. Such a person can be self-employed, salaried or Non-Resident Indian. You can have as many as six co-applicants for your joint home loan.

Joint Home Loan Eligibility Conditions for both the Applicants

– A co-borrower need not necessarily be the co-owner of the property, although some lenders recommend the co-borrower to be the co-owner of the property.

– The borrower and co-borrower are jointly responsible and liable for repayment of the joint home loan.

– Unmarried couples living together and friends are not allowed to take a joint home loan.

Documents Required for Joint Home Loan

The documents required for a joint home loan are same as any other home loan. While applying for a joint housing loan, both the applicants have to submit the following documents:

– Know Your Client (KYC) details i.e. identity and address proof of the co-applicants such as PAN card, Aadhaar card, etc.

– Income proof such as salary slip of last 3 months, form 16, income tax return, etc. – – Self-employed applicants have to submit last 3 years balance sheet and profit and loss account attested by Chartered Accountant.

– Property documents

– Proof of co-ownership of the property, if any

– Bank statements or passbook

However, the eligibility criteria and documentation requirements differ from lender to lender. The above mentioned are general documents which every lender demands.

To Sum Up

A joint home loan definitely offers added advantages over an average home loan. It makes you eligible for a higher loan amount and also extends tax benefits to all the applicants. All you have to do is choose the right lender who can offer you better loan terms suiting your specific needs, so that you can buy your dream home without worrying about the financial obstacles. You can use home loan EMI calculator to assess the amount of EMIs that you will be required to pay towards your home loan. Additionally, you can also check the pre-approved offers by sharing a few basic details.

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