Buying one’s own house is one of the biggest achievements for any individual or family. However, many people face roadblocks in the form of low CIBIL scores, lower affordability and several other aspects. However, prospective homebuyers can consider applying for a joint home loan. This helps in getting easier approvals and scaling up home loan eligibility.
There are several benefits available for those applying for joint home loans:
- Save taxes under Section 80C- According to Section 80C, both the borrowers can claim tax deductions on principal repayments in the EMI. The maximum amount is Rs. 1.5 lakhs annually. The exemptions include the contributions made towards investments like life insurance premiums and PPF. The deductions can only be claimed for a home which is fully constructed.
- Savings from Section 24 (B) – Under Section 24 (B) of the Income Tax Act, deductions can be claimed for a maximum of Rs. 2 lakhs in case of a self-occupied property. The construction of the home should conclude within 5 years from the commencement of the loan.
- Savings from Section 80EEE- First time home borrowers can claim deductions up to Rs. 50, 000 under Section 80EEE. However, to claim this deduction, the value of the property should not cross Rs. 50 lakhs and the loan amount should not surpass Rs. 35 lakhs.
You should always consider a few things prior to jointly applying for a home loan. The co-applicant for the joint home loan should have consistent earnings since the EMIs will be split up accordingly. Income of both parties does not have to be absolutely equal and the property ownership should be divided based on the income group under which every applicant falls. Both applicants should have separate life insurance policies.
In case you are planning to apply for a joint home loan, all terms and conditions should be ascertained carefully. The burden of the home loan can be responsibly shared between two co-borrowers and there are major savings arising from tax benefits.