When a certain individual cannot afford or capable of getting a home loan single-handedly, it is much better to collaborate with one or more people to apply for the home loan. A joint home loan is also taken to avail a higher loan amount and distribute the burden of finance equally with others.
The loan is basically taken in the name of two or more people jointly. One of the two applicants is a primary applicant, and the other one is a secondary applicant.
This would work as a benefit even for the people who do not have a very incredible credit score and are in urgent need of a home loan.
The Necessity of a Home Loan:
Availing for a home loan is a very crucial financial decision and at the same time, is a very basic necessity for life to build a house to reside in for a balanced and wholesome life.
With the growing population and at the same time growing demands, the rise in the prices of the properties in the last ten years has been a huge issue for the majority. It has made it difficult for some of the people to even think of such an act to build a home, let alone be their dream house.
Here is where home loans come to the rescue. Home loans are usually aimed at such people to help them reduce their financial burden and climb the steps of success to build their perfect house to reside in. There are also government backed loans such as USDA home loans which you can take advantage of if you find yourself to be qualified.
The financing firms and banks help the people to avail themselves such home loans based on their requirements and specifications. They also assist them in the entire procedure of owning and naming their house theirs.
Joint Home Loans to The Rescue:
Again, people who face difficulty applying for a home loan because of financial reasons have an alternative and easier option of a joint home loan.
A maximum of six applicants who share the loan amount and help reduce the economic burden of a single person can access a joint home loan.
The people who jointly contribute to the home loan are usually blood relatives. This is not usually permitted to friends or people not related by blood.
The age factor and the loan’s time period usually vary from person to person and the amount of loan. For example, if a parent and a child jointly apply for a joint home loan, the maximum term is ten years.
The Documentation Process:
The documents required for joint home loans are completely similar to those of individual home loans. Only the primary applicants are expected to submit their KYC along with other identity proof.
Again, the repayment procedure is very simple. The loan amount and interest, which is fixed per month, is either made single-handedly by the primary applicant or by the joint account available in many ways like cheques or ECS.
The joint applicants can also decide on a pre hand the EMI amount that is to be paid each month and apply for automatic deduction from the bank accounts.
There are no such benefits for people holding joint home loan accounts. It is almost the same for single home loan accounts.
Though, a small benefit is provided to the joint home loan account holders. Both of the co-applicants can apply for home loan deduction (according to section 24(b) ) instead of just one of them. This helps in the overall deduction!