Benefits of Adding Co-Applicant in Home Loans

If you are planning to buy your dream home and your income is low due to that if you are not eligible for the loan amount you are looking for than you can add a co-applicant. By adding co-applicant with stable income you can increase your eligibility for loan amount for buying your dream home

Co Applicant is like a partner who applies along with borrower for a loan to increase eligibility for loan for a larger loan amount

.Co-applicants in a home loan need not necessarily be co-owners of the property. The owner of the property should always be the main applicant of the Home loan.
Co applicant cannot be a minor or any person. Bank has decide few relationship for co applicant in home loan:
✔ Husband and wife can be a co-applicant.
✔ Father & son can be co-applicant and property should be in their name jointly but  if a person have two or more son’s  in that case  father cannot be the main owner of the property.
✔ Two brother can be co-applicant in home loan and co-owner of the property but two sisters  and  brother & sister cannot be co-applicant in home loan.
✔ Unmarried daughter & father can be co-applicant. In this case property is only in the name of daughter & father income should not be considered while calculating  the eligibility amount of the loan.
✔ When husband & wife are co- applicants, the term of the loan can be a maximum of 20 years, subject to the retirement age of the older applicant. If co-applicants are parents and children or siblings, then the maximum term can be 10 years.

Documentation required for Co applicants

• Identity proof – Pancard, Driving license , Passport, Voter Id , Ration card
• Address Proof – Life insurance receipt, bank statement, mobile bill, electricity bill, passport
• Proof of co-ownership of the property

TAX benefits

Co-applicant can claim tax deductions under Section 24 of the Income Tax Act against interest repaid and under Section 80C against principal repaid.

If husband & wife jointly apply for a loan for a self-occupied property to be held by them in equal proportion, then both would be able to claim deduction on the principal and the interest repaid separately from their incomes to the extent of their respective share in the house and the loan

IF UNDER DISPUTE?

If one of the co-borrowers refuses to repay the loan than the bank process recovery from both the applicant.

For Information: How to Get a Best Home Loans in India