A roof over one’s head is a cherished dream that most middle class salaried individuals dream of. However, despite the presence of many financial institutions who are willing to dole out loans, as a potential borrower, opting for the Loan can be a big step ahead for you mainly due to the affordability factor. So if you are contemplating about the purchase of your first property, applying for a joint home loan is a prudent decision as it enhances your home loan eligibility manifold and makes it more affordable for you.

Further, if you co-apply with a woman who is working and is closely related to you such as your wife, sister or mother, you can even save up on home loan interest rate. Let’s delve into the details to see how co-applying for a home loan with a woman may turn out to be advantageous for you.

Enhanced loan eligibility

As mentioned earlier, when you co-apply for a home loan, incomes of both applicants are clubbed together for assessment purposes. As a result, you may be able to get a bigger loan that both of you can share responsibility for. As a result, the burden of home loan repayment does not fall on the shoulders of one person alone. This reduces the pressure of entire repayment on a single individual.

Further, if your co-applicant is a lady who has maintained a high credit score, your Loan Application is likely to get through without any glitches. Your CIBIL score along with your spouse/mother/sister will be considered as a measure of your credit health at the time of your loan application. If both you and your co-applicant have a good score of 750 and above out of 900, your loan eligibility may enhance further.

Reduced rate of interest

If you and your lady applicant are first time home buyers you may even be eligible for lower rates of interest. Most lenders offer a differentiated home loan interest Rate for ladies, which is normally a percentage point lower than a prevailing rate of interest. While it may not seem like a big concession on home loan interest rate upfront, over the long term it translates into big savings on the interest payable to the bank. This concession is however applicable for first time home buyers only. Some lenders also insist on the lady co-applicant becoming a co-owner of the house to ensure that she is equally liable for repayment along with the primary applicant of a home loan.

Higher tax benefits for co-owners

If you and your wife are co-owners of the property, you can enjoy tax deductions on your home loan separately. Both you and your spouse can claim deduction of up to Rs 1.5 lakhs on repayment of the principal amount under Section 80 C of the Income Tax Act and Rs 2 lakhs for the repayment of interest amount under Section 24B of the Income Tax Act, if the property is self-occupied. Thus, if you and your co-applicant are co-owners and occupy the premises you have applied for a home loan for, you can jointly save up to Rs 7 lakh in taxes in a financial year.

What you need to bear in mind before a loan application:

As is evident there are many advantages of applying for a home loan with a lady of your kin, especially your spouse. However before making the loan application, it will serve you well to keep the following in mind.

• Get both your documents in order as specified on the website of your chosen lender
• Make sure that both your CIBIL score is in order before the loan application by referring to your CIBIL report.
• Do not apply for any other loans at least six months prior to applying for a home loan.
• Re-asses your monthly budget to accommodate the EMI and chalk out a repayment plan.
• Build a contingency fund bit by bit to take care of your home loan repayments just in case emergency strikes and your cash flows get halted.

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