For most working couples, the
normal approach towards a home loan is simple: One salary is earmarked for loan
repayment while the other is used for managing the daily expenses. This mindset
is also the reason why usually only one spouse applies for a home loan. However,
there are several advantages of taking a home loan jointly.
Repayment capacity
There are several instances
where a couple may be about to miss on a dream home because of a slightly lower
income level denies them access to the necessary finance. In such a scenario,
clubbing the income of the spouse increases the repayment capacity and
therefore, the eligibility amount as well.
Rate revisions
Having a co-applicant also
helps to cope with another factor, rising home loan rates. If the interest
rates on home loan go up; your total repayment amount also increases to that
extent. Since the only thing in the equation that hasn’t gone up is your
income, obviously your repayment capacity, based on which they calculate the
eligibility amount, comes down slightly. However, adding your spouse as a
co-applicant can help negotiate this hurdle as well.
Dual benefits
If the interest rates rise
after you have taken the loan, coping with the higher EMI from just one account
may prove to be a difficult task. Having a joint applicant and repaying the
loan from two accounts can prove quite helpful at such times.
Similarly, If the home loan
interest rate increases too high and you need to renegotiate a longer tenure
instead of paying a higher equated monthly installment or EMI, again the
lending institution will take a more favourable view in terms of granting such
an extension if there are two working people repaying the loan.
Tax benefits
Since both spouses are repaying
the loan jointly, the tax benefits will be shared in proportion to their EMI
contribution. Often, just one applicant cannot avail the entire tax benefit
limit due to other tax saving instruments, etc. so having two spouses helps
here as well. If the incomes of both spouses rise and there is scope to prepay
the loan, again a joint application gives the bank a comfort zone about
allowing it.
So when it comes to flexibility
and adjustment, having your spouse as a co-applicant definitely beats facing
financial complications alone!
