While to some basic benefits of buying a property and applying for a home loan in joint name as in the name of your spouse are well known, but you still may not be acquainted with the whole idea as to why it is important and beneficial to include a co-applicant. Here’s is a whole narration on this:
1. Competitive interest rate terms as well as higher loan amount: So, it comes as a benefit when both the partners are working as in that case the home loan eligibility amount goes higher and in such a case you can either look for a property of a higher price or limit individual’s contribution.
In the usual case, an individual is able to secure 5 times as loan amount in comparison to his or her net salary. So, if you earn 5 lakh as your annual pay-out, then maximum loan amount you can seek from a financial institution is 25 lakhs. Needless to say, there are other factors at play that also decide on your loan amount.
Also, in a case where the first owner is shown as a woman, there are better rates such as a rebate of 50 to 100 basis point.
2. An application can be sanctioned on the basis of credit profile of the second applicant: Also, when the husband’s credit profile is not worthy, banks make a call basis the credit profile of the other applicant who probably is in a better position when it comes to financial health.
3. Stamp duty and registration charges lower for the female applicant: When it comes to stamp duty and other costs associated with real estate purchase there too is leeway for women owners with cheaper stamp duty and other charges. Say in Delhi while ownership of the premise solely in the name of a man attracts 6% stamp duty, the same goes down to 4% in case of women being the first owner of the property.
4. Succession planning gets smooth: When you have taken the first step with joint ownership, your future course in the case of succession planning will get smooth and without much of legal hassles and paperwork. As when there is an eventuality, the jointly owned property will then go to the living owner on its own.
5. Taxation benefit: Two ways the income tax exemption can be claimed one on the principal payment on home loan up to Rs. 1.5 lakh under section 80C and when a property is co-owned, both the applicants in the proportion of their ownership in the property shall be able to make a claim on principal repayment up to Rs. 1 lakh.
