One’s own house is a dream to almost everyone out there, and home loan allows you to fulfill that dream. However, buying a property depends on the loan, and the loan, in turn, depends on many things, such as your credit score, your age, income, and several other things. So, if you add up a co-applicant for the home loan, then you will be benefiting hugely.
Remember that a co-owner and a co-applicant is not the same. A co-owner is the holder of a share in the property, whereas a co-applicant won’t necessarily need to be co-owner of the property. So, if we see from that viewpoint, every co-owner is a co-applicant. But every co-applicant need not necessarily be a co-owner. Co-applicant will help you out in getting a bigger loan and will also help you with the loan repayment capacity. Anyone who is an immediate relative can be a co-applicant. So your co-applicant can be your spouse. He/she can be salaried or self-employed. He/she can also be either a resident of India or an NRI. So, how can a co-applicant help you out with the home loan? And what are the benefits of the co-applicant?
- Higher loan eligibility: If you are applying for a joint home loan, then you might get a higher amount of loan. On top of that, you will get assistance for the repayment of the loan as well. Also, if you are adding your wife as the co-applicant, then you will get a cut off available to women only.
- Higher tax benefits: Having a co-applicant will help you out while you are submitting your IT return. Provided the fact that the co-applicant is a co-owner as well, you can get a lot of tax benefits. For example, if your co-owner is contributing to the loan repayment, then you can avail tax benefits under 80C of the ITA. This will give you a tax redemption up to Rs. 1.5 lakhs. Further, if you are residing in the apartment that you just bought, you can also avail benefits under section 24 of the ITA which gives you a tax rebate of Rs. 2 lakhs. And if you have leased the property, then you will get the benefit of reducing the whole interest rate. And there is no upper limit to that. If you are applying for a home loan and have a working co-applicant, then the IT deduction is much higher than that of a single applicant IT deduction. Hence, it is a better option to apply with a co-applicant provided he/she is helping you out in the loan repayment.
Applying for a home loan is a fairly easy process. All you need to do is submit the KYC (ID proof and address proof) alongside other vital documents, such as income and property documents. All the co-applicants ‘ KYC is a necessity, while you need to submit the income proof of the co-applicant who would be helping you out with the appraisal. Remember, that home loan is a better option, not only from the perspective of a tax deduction but it will also help you to deduce the price of the property.