Things to Consider if You Are Planning to Become a Home Loan Co-Applicant

Owning a house is still a dream for millions. Although housing finance can make this dream come true, what if you are not eligible for one? Fret not! A joint home loanis your way out. This house loan type helps two borrowers distribute the responsibility towards the loan.

Availing of a home loan is a serious commitment. And, when talking of co-applying for housing finance, you need to be extra careful. Take a look at specific things you must consider before becoming a house loan co-applicant.

• Your part in the joint housing loan

Defining your role in the joint housing loan is imperative. Are you a co-owner of the property, or is it to simply meet the criteria of the home loan eligibility calculator? Whatever, the condition is, achieve clarity in terms of your contribution towards the partnership.

If you are going to be the co-owner of the house, then you must sign up without hesitation. However, if you are dicey about your part as the co-applicant, you must opt out of the deal.

Additional Read: What are Joint Home Loans? Eligibility and Documents Required for It

• Your credit rating is also necessary

When you become a co-applicant, your income, age, and credit score also comes into due consideration. So, if your credit rating is low, the lender may not furnish the loan. This will further degrade your credit score. Additionally, as the home loan co-applicant, any delay/default in the repayment of the loan amount will affect your credit score too.

• Repayment responsibility

You can increase the gross loan amount through a joint loan. However, as a home loan EMI calculator suggests, the EMI increases with the rise in the loan amount. And, in the event of the death of the primary borrower or his/her inability to pay back, you will be legally liable to repay the loan.

You can make use of an EMI calculator for home loan to calculate what you are signing up for beforehand. Also, weigh all the possibilities before assuming the position of a joint applicant.

• House loan interest rates

As a general trend, money lenders tend to offer low home loan rates to women borrowers. This pointer can help you save on some money when you are going to borrow funds in lakhs. But mind you, this is valid only if the woman co-applicant is also the co-owner of the house.

• Eligibility for tax benefits

Housing loan applicants can save on income tax returns. And, you can gauge the same through a home loan calculator. However, it is only applicable if you have the ownership of the property.

Co-applicant and co-owner are not synonymous terms. So, you cannot claim tax benefits if you are merely the co-borrower. Therefore, think it through if you are not relishing any additional tax or insurance benefits and only enhancing the home loan eligibility.

Additional Read: Difference between a Co-borrower, Co-owner, Co-signer and Co-applicant of a Home Loan

In a nutshell

Conscientiously apply for sharing the house loan responsibility if you want to lessen the burden of a family member.  You can rely on Tata Capital for availing of attractive housing loans with quick documentation and rapid processing. Our competitive interest rates will make the loan repayment a little bit easier for you.

Get in touch with us today to avail of lucrative housing finance!