If a family is purchasing a
large flat and no one member is eligible for the loan required, what can we do?
Based on the profile of the
customers, loan eligibility can be decided by considering the income of all the
co-owners, provided all of them join the loan documents. Some of the banks are
also considering the income of earning close relatives such as brothers, even
if they are not co-owners of the property depending on the merits.
How many family members can
jointly apply for a home loan and how will eligibility be calculated? How would
the tax benefits apply?
Any number of family members
with ownership in the house property (siblings) can jointly apply and
eligibility will be assessed based on the income of the earning applicants. As
earlier explained, banks are even considering income of earning close relatives
who are not co-owners of the property in special cases. It is to be noted that
Individual banks follow their own policies in this regard. Interest debited in
housing loan can be claimed equally by all the parties to the loan whose income
is considered for repayment of the loan.
Tax benefits can be
doubled/multiplied by availing a joint home loan. All the borrowers can
simultaneously avail these income tax rebates, thus maximizing the tax benefits
of the home loan. So availing a joint home loan is certainly an attractive
financial option to buy a house as well as save maximum possible on income
taxes.
In the current scenario, is it
advisable to prepay a home loan or not?
If we have excess cash, it is
always better to prepay as it will substantially reduce the interest burden.
Prepayment of home loan also counts towards tax rebate under section 80C as it
is being used towards prepayment of the principal.
At the same time, we must also
consider whether the excess cash will earn us better income by investing in
some other securities/properties rather than prepaying the loan. However,
prepaying the home loan without keeping any funds to meet emergency situations
may not be a good idea.
