Now that more and more women are entering the workforce and gaining financial independence, it is not uncommon for both partners to share the burden of managing the family budget. If you and your wife have finally decided to buy a home and take out a Home Loan to make your dream a reality, there are a number of advantages to doing so as a married couple.
If you and your wife have been thinking about getting a Home Loan in Bangalore together and purchasing a property together, here are some pros and cons to consider.
Shared loan: Lower mortgage rates for women
Most housing loan companies may reduce the interest rate on your home loan by as much as 5 basis points (0.05%) when your wife is included as a borrower or co-borrower on the loan application. Keep in mind that the wife must be the principal or joint applicant for the Home Loan in Chennai in order to qualify for the discounted rate.
The practise of registering property jointly: Savings on stamp costs
Even though there is a slightly cheaper Home Loan interest rate available to couples who buy a home together, many couples don’t realise that they are eligible for a deduction under section 80C of the Income Tax Act, nor do they know about the concession offered to women. You can get a tax write-off for the amount you spent on stamp duty and registration when you buy a house, up to Rs.1.5 lakhs in any given financial year. Depending on the state, a discount in stamp duty of 1% to 2% may be available if a woman is the sole or joint owner of a piece of property.
Keep in mind that you can only deduct expenses in the year they were incurred. However, you may only claim this deduction once construction is finished and you have taken possession of the property.
Enhanced savings from tax breaks: Authorized under Titles 80C and 24
First and foremost, always keep in mind that you and your wife can only receive tax benefits from a Home Loan in Chennai if she is a co-borrower and co-owner of the home. She won’t be able to deduct her portion of the EMIs from her taxes if she is only a co-borrower and not a co-owner. Both the principal and interest payments on the Home Loan in Bangalore are tax deductible for the couple at their individual rates of interest under sections 80 C and 24, respectively. However, they must both be contributing members of the household and joint property owners in order to qualify for EMI.
In addition, borrowers can deduct interest paid on a home loan during the pre-construction period at the standard interest rate under Section 24b, since many people get mortgages to buy properties that are still in the process of being built but whose owners expect to take possession at some point in the future. The maximum length of time for which this can be extended is 5 years (in 5 equal installments). However, remember that the maximum amount that may be claimed remains set at Rs 2 lakh per year, and that this includes interest payback for both the pre- and post-construction periods of the property for which you are taking Home Loan in Chennai..
A maximum of Rs.1.5 lakhs can be deducted annually as principal payment, and Rs.2 lakhs can be deducted annually as interest repayment. In cases when one spouse owns a larger share of a property than the other, both parties are entitled to deductions proportional to their ownership stake. It is important to keep in mind that the total principal repaid in a given year cannot exceed the combined claims made.
Conditions under which the wife can join in as a co-applicant
Either the wife or the husband must be the sole owner of the property.
The wife must be either the sole or joint owner of the property in question in order to be considered for either the primary or joint applicant on the mortgage loan. As long as she is willing to be co-owner of the property, she may be recognised as a co-applicant even if she is not working.
Loan qualifications and ability to repay taken into consideration together with the wife’s earnings.
Your wife can become a co-applicant on the Home Loan in Bangalore if she has a job and her income will be factored into the loan’s total eligibility and repayment capabilities. The husband has had a lot of trouble getting a Home Loan in Chennai because of reasons like his income being below the required threshold or having a low credit score. Your loan application’s chances will improve if you add your breadwinner wife as a co-applicant. Keep in mind that this is only possible if the lender finds your wife to be a good risk in terms of her credit, income, debt-to-income ratio, etc. when deciding the interest rate on the Home Loan to be given to the joint loan application.
Who else outside a spouse qualifies as a co-applicant?
There is no universal rule regarding the conditions under which borrowers can apply for a mortgage with a co-borrower. In most cases, only immediate family members such as a parent, mother, son, daughter, spouse, sister, or brother will be accepted by a lender as a co-applicant on a house loan. However, the eligibility of any given relationship as a basis for inclusion on a house loan lender’s list of co-applicants is subject to the lender’s own laws and regulations.
For instance, certain Home Loan in Chennai providers may not approve brothers as co-borrowers due to the potential for property disputes down the road, which could result in an irregularity of default in the combined payback of the Home Loan in Bangalore.
It’s also likely that some companies won’t let you apply with your sister for a mortgage because they think you won’t be able to pay it back when you get married.