by Shreekant Rao
Published Thu, Mar 9th 2017, 10:12 | Finance
Suneel was working in a Pvt. Ltd Company. To purchase his dream home, he applied for a home loan with the suitable lender. However, owing to less salary slab he couldn’t qualify for the requisite loan amount. He, therefore, reached out to a housing finance expert for a suggestion. The experts suggested him to apply on a co-applicant basis when they came to know that Suneel’s wife is also working in an MNC firm at a manager post. So, Suneel once approached again for the same product at the same lender and this time, his application was accepted and processed.
There are many aspirants like Suneel who face rejection of housing loan due to low salary slab, low CIBIL score or some other reasons. Therefore, a co-applicant plays an important role for a home loan application is it will not only help them to improve credibility but also give assurance to the banks or finance companies that their loan amount would be recovered on time.
Here is how co-applicant can help us:
Enhance eligibility
One of the straightforward benefits of joint basis applicant is that it helps you increase your eligibility, the income of both the applicants is considered in the case of a joint loan. Banks and NBFCs accept parent, spouse, brother, as home loan co-applicants. The increased eligibility will thus help you own a bigger house.
Special Schemes
Women co-applicants are considered as highly assured when it comes to loan repayment. Therefore, banks and NBFCs introduce schemes oriented to the benefit of women and encourage a joint home loan with women. This, way the house ownership will not be male dominated and in case of any quarrel of issues, women can also bank a suitable share in their dream home. Some leading private finance companies offer housing loan with interest rates as low as 8.65% p. a onwards. The monthly installment would be mere Rs 780 per lakh for a women-oriented home loan.
Tax Benefits – The interest rate paid on a housing loan is a major component in tax savings. In case of a joint applicant, both of them are eligible to claim tax benefits. Thus, there would be bigger savings which you can root towards your monthly installment for a couple of months.
Mitigate Risk
When one becomes a co-applicant especially parents or spouse, the risk is segregated equally between the partners. The co-applicant is thus equally liable for the repayment of the loan. You draw a mental peace of sufficient financial back-up for loan repayments.
Experts say while going for a joint home loan, take care of the following points:
· A co-applicant is one, who will apply with the borrower for a loan. A co-owner is one who will have an ownership in the property.
· Co-applicants will also need to furnish all the required documents for housing loan processing. The documents include PAN card copy, bank statements, income and address proof, and property papers
· Co-applicants who work will increase their chance of higher loan eligibility increases
Lenders will prefer to receive the monthly installment on your housing loan through a joint bank account. However, if the co-applicants is temporarily residing in another city for work or some purpose they can pay the EMI through separate cheque as well.
Co-applicants are one of the best ways to increase your chance of higher loan eligibility. Availing a housing loan with them has quite a few advantages. Besides, it eases off your pressure in the long run of home loan repayment as well.