3 Things To Consider While Selecting The Right Financial Partner For Your Home Loan

Every housing finance expert will advise you to consider all the facets of even the best home loan really well before you accept the agreement. It totally makes sense to choose the right person as a co-applicant. Though, traditionally, co-applicants for home loans can either be married couples or blood relatives like siblings or parent-child. Here are three things you need to consider that will help you to identify the right financial partner for your house loan.

Will the co-applicant be a co-owner as well?

The legal aspect here is simple. At times, the banks and housing finance companies in India insist on having co-owners as co-borrowers. However, you can always include the right partner as the co-applicant for your housing loan without him being the co-owner in the property.

Who will pay the EMIs?

When it comes to home loans in India , open a joint or single account and use it to make payments via a cheque or ECS. That’s the technical part of it. When it comes to actual parts of the payments, it totally depends upon the understanding between the co-applicants. This is the most important factor while selecting the financial partner. However, lately, it has been a great advantage to have a woman as your co-owner and co-applicant as there is a considerable discount available for women borrowers. Although, it does require some due thought as whether the co-applicant is an earning member of the family and can make a dependable contribution towards the repayment.

Who will get the tax benefit?

Every co-applicant can enjoy tax benefit on the home loan repayment in terms of principal amount and interest. As per the section 24 of Income tax act, you can get tax benefit over the interest repaid. Additionally, as per section 80 (C) of the Income Tax Act, applicants and co-applicants will also get the tax benefit over the principal repaid. So it makes sense to include your earning wife/husband as a co-applicant; as they can also enjoy the tax benefit against their income; which lowers the investment and payment of tax for every fiscal year.

Nonetheless, personal and financial understanding while repaying the housing finance EMIs is of utmost importance. Though you know that you will certainly observe an increase in your home loan eligibility and get required support during the home loan approval process; at the end of the day, you can use a smart finance partner who can support you throughout the home loan tenure.