In the recent few years, the demand for Housing Loans has witnessed a significant rise. This is primarily attributed to the fact that the prices of the residential real estate have increased substantially during the last decade, making it virtually impossible for a large number of prospective home buyers to purchase a property through outright purchase. If you are also thinking of buying your own house, rather than waiting for the property prices to fall, which might never happen, or just sitting helplessly, you must not think twice before Applying for a Housing Loan. Having your own roof above your head is one of the proudest moments of an individual’s life, and you cannot really put a price to the happiness you get out of being the master of your own house.
About Housing Loans
Housing Loans, popularly known as Home Loans, are a secured loan offering that you can avail from any of the numerous financial institutions operating in India. As it is a secured loan, the property that is purchased with the loan amount must be mortgaged with the financial institution, which will then create a charge over it. While the property is mortgaged with the lender, you can continue living in it or rent it out without any issues but make sure that the property is used for residential purpose only. In order to satisfy the mortgage, you need to repay the entire loan amount along with interest over the tenure of the loan, which can go up to 30 years. The rate of interest against Home Loans starts at 8.45% and can be increased depending on your eligibility factors.
To cater to the rising demand for Home Loans, many lenders have now started offering their Home Loan products through online channels, i.e., their website or finance marketplaces. Popular finance marketplaces like MyMoneyMantra allow you to compare different Home Loans, understand their terms and conditions, check your eligibility, calculate your EMIs, check various features and other relevant information. After you have done thorough research and are satisfied with a particular lender, go ahead and apply through online platforms as MyMoneyMantra. If your profile meets the requirements of the financial institution, their representatives will get back to you and take the process further from there on.
Why must you consider joint ownership of property?
When you apply for a Home Loan, the lenders calculate your eligibility based on your annual income and in most cases offer up to 6-7 times of your net yearly income. Due to the high real estate prices, this amount might not be sufficient to help you purchase your dream house. In such a situation, you must consider getting co-applicants on the Home Loan application.
This significantly improves your chances of getting the required amount as the income of all the co-applicants will be considered by the lender while assessing your Home Loan eligibility. Getting co-applicants on board also assures lender regarding timely repayments of the EMI (Equated Monthly Instalment). Though, some lenders might put a condition that the co-applicants can only be family members, so you need to check this out first before proceeding ahead with the application.
Benefits of having a jointly owned property
When you decide to get co-applicant(s) on your Home Loan application, there are various benefits that you can avail. Here are 4 significant benefits that you enjoy with joint ownership of the property:
- Income benefits
One of the major Home Loan benefits is income tax rebates offered by the Income Tax department. The Income Tax department provides various concessions on Home Loan repayments. There are different sections of the Income Tax Act that offer you concessions on repayment of the interest component as well as the principal component. When you have multiple family members on the home loan application, each of you gets the income tax benefits up to the maximum amount possible, saving you a lot of money.
- Enhanced eligibility
When you have multiple co-applicants on board your Home Loan application, your eligibility is significantly increased as the income of all the co-applicants is taken into consideration by the lenders. Lenders usually offer up to 80% of the value of the property as a Home Loan, so having more applicants will increase the amount available to you. This comes in really handy when you are purchasing a property in a metropolitan city where property prices are really high, and income of one individual might not suffice the requirement.
- Smooth succession
If a will has been prepared by any of the co-owners, it has to be probated from the court of law. This clause is applicable across all major cities in India. Getting probate is a lengthy and time-consuming process. Having multiple owners for a flat situated in society ensures that in case of death of a joint owner, the ownership is transferred in the name of remaining co-applicants if the property and does not require probate from the court. The legal heirs of the deceased owner have the right to claim their share in the property.
- Concession on stamp duty and interest rates
There are various concessions offered by Government and financial institutions if the sole owner or the first holder of the property is a female. There are stamp duty concessions offered to female owners offered by the government. Concessional rate of interest is offered to female applicants by the financial institutions if they are the sole or first holder of the property.
The benefits offered by joint ownership of property are significant but should not be the sole criterion for going for joint ownership of the residential property you will be acquired through a Home Loan. You need to consider other factors as well before taking a final decision.
Also Read: Home Loan Process Explained!
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