For those looking to buy a property, these are the reasons why opting for a joint home loan would be a good idea.
Common home loans often provide respite for many mortgage applicants, especially those struggling to get approved on their own. Although in most cases it is not mandatory to have a co-applicant when applying for a mortgage, it does not have one but several advantages.
Insufficient income, poor creditworthiness, high debt ratio, etc., often create obstacles to the approval of an individual applicant’s home loan application. In such cases, opting for a joint home loan can improve overall creditworthiness. Adding a co-applicant with a stable income, good credit, and satisfactory ability to repay increases your chances of obtaining loan approval. Because lenders consider the combined income of joint loan applicants when determining the loan amount, you may also qualify for a higher loan amount if necessary.
You can benefit from tax advantages in the return of principal and interest in accordance with articles 80C and 24b. While principal repayment can be claimed up to Rs 1.5 lakh during a fiscal year, interest repayment can be claimed up to Rs 2 lakh for the independent property during a fiscal year. No upper limit has been set for interest reimbursed on leased property. When obtaining a joint mortgage loan, co-borrowers can claim these tax deductions separately, provided they are also joint owners of the property. Remember that as a co-borrower, rather than a co-owner of the property, you will lose the associated tax benefits even if you have contributed to reimbursing the EMI.
This year an additional deduction of Rs 1.5 lakhs for interest payments on real estate loans made in the period from April 1, 2019, to March 31, 2020, was added to the Union budget. This can be claimed Beyond the Rs 2 lakh deduction available for interest payments on home loans from first-time borrowers, increasing the total interest deduction to Rs 3.5 lakh per tax year. Joint mortgage borrowers would take advantage of this deduction separately.
You can benefit from reduced interest rates on home loans when you apply for a joint loan with a co-applicant. Lenders generally offer discounted interest rates to women applying for a home loan, with the interest rate typically up to 5 basis points (0.05%) below the applicable standard rate. However, be aware that some lenders may require the woman to be both a co-owner and a co-applicant to qualify for the discounted mortgage rate.
Registering your property on behalf of a woman as a sole proprietor or co-owner can help reduce stamp duty. Although stamp taxes vary from state to state, some states typically offer 1-2% lower stamp taxes for women. Remember that stamp duty, registration fees, and other costs directly related to the transfer of ownership are eligible as a Section 80C tax withholding with a maximum limit of Rs 1.5 lakh per tax year. Please note that this deduction must be claimed in the same year these costs were incurred.