Do you want to take out a home mortgage but simultaneously wish to guarantee you save the most money and have the least headaches with the process? If so, opening a co-applicant account with your spouse may provide access to many advantages, such as considerable tax reductions and smoother loan processing. Here’s a detailed look at how a joint home loan with your spouse can be a game-changer for your financial future.
Key Benefits of a Joint Home Loan
1. Easy Loan Approval
Approval is one of the most difficult challenges in taking out a home loan. A joint home loan can be the solution if you or your spouse are struggling with credit scores, income eligibility, or other factors. When creditworthy spouses underwrite it, lenders consider both spouses’ income, credit scores, and ability to repay, significantly increasing loan approval prospects.
This may also be useful if one of you is self-employed, has a poor credit score, or fails to qualify independently. When an integrated application is used, the lenders are provided with a more comprehensive, holistic knowledge of the applicant’s financial state, thereby increasing the probability of the loan’s approval.
2. Lower Interest Rates for Women
One of the under-appreciated gains of a joint mortgage is that you can obtain a better interest rate when adding a female co-borrower. Most banks and financial institutions provide women borrowers with a lower interest rate than male borrowers, generally by 0.05% less. Although the amount may appear small, during a housing loan period, compared, this can result in considerable savings. To embrace this advantage, ensure that your wife is not just a co-applicant but a co-proprietor of the immo.
3. Higher Loan Amounts
If you are a couple applying for a home loan, the loanable money amount is determined by the sum of both applicants’s incomes. This implies the possibility of getting a more significant loan than if you applied individually, particularly if both of you have a stable source of income and credit history. Nevertheless, it’s crucial to keep a manageable debt-to-income ratio (50-60% for optimum) to remain qualifying for a loan with a larger amount loan.
The total income can be used to get a bigger loan for the house you’ve always wanted, provided both partners can comfortably meet the EMI payments.
4. Massive Tax Savings
Another of the strongest arguments that favor applying for a joint mortgage is the tax advantages. If both of you co-own the property and co-lend for repayment, you can claim tax deductions on principal and interest payments in light of the applicable sections of the Income Tax Act.
- Section 80C: In the double applicant schema, the two applicants are each entitled to a deduction of up to ₹1.5 lakh annually on the total principal amount. This deduction, on top of it, may give tax savings of up to ₹3 lakh for both partners claiming in full.
- Section 24: According to Section 24, both husband and wife can claim a deduction of up to ₹2 lakh each from the rate of interest paid on a home loan. This adds up to a total tax savings of ₹4 lakh for both applicants.
A joint home loan can offer tax benefits up to ₹7 lakh per year, depending on the amount borrowed. This can significantly impact your annual tax liability, making it an effective way to save while owning a home.
5. Shared Financial Responsibility
A joint home loan is not only a financial gain but also a gain/loss of financial burden. Divining the EMI burden between both partners decreases the pressure on one person. This can make it easier for both of you to manage monthly payments, ensuring timely payments and a healthier financial outlook.
On-time EMI payments will also potentially boost your credit scores, which may be helpful for your future financial requirements. Mutual responsibility leads to a feeling of teamwork, and both of you can collaborate to put the loan into service smoothly.
Final Thoughts
A joint home loan can simplify the homeownership journey by combining the advantages of easy loan approval, lower interest rates for women, higher loan eligibility, and massive tax savings. But what’s paramount is that it enables financial sharing, stress reduction, and credit score improvements. If you’re looking for ways to save on your home loan while easing the process, consider a joint home loan with your spouse today.
Want to take advantage of these benefits? Let’s investigate joint mortgage products and make the home of your dreams as attainable as possible!