When it comes to a home loan, joint home loans are perhaps the best option. A joint home loan will help you out to secure a bigger loan amount and will help you out to deduct a considerable amount of tax. But there are certain things which are considered as true but the claims are false. So, here are the five myths about Joint home loans:
- The myth is if the house is under single ownership then the co-applicant has no role when it comes to the home loan closure. But this is not true at all. The fact is, the bank insists on a NOC from the co-applicant before handing out the original documents for the house. When you are applying for a home loan, you might have a good relationship with the co-applicant. But if the relationship goes sore, then it will be very tough for the first applicant to get a NOC for the documents.
- Most of the banks and HFCs inform that the co-applicant’s signature is just a formality. But it is not true at all. The co-applicant, whether salaried or self-employed has high stakes when it comes to repaying the loan amount. The point is before you apply for a home loan with a co-applicant, it is very important that you read the fine print of the contract thoroughly.
- The bank insists that a housewife or non-working applicant can actually increase the amount of the loan. But in reality, if the co-applicant is not either salaried or even self-employed then there is no chance of appraisal in the loan amount. Banks appraise the loan amount only when they see a higher repayment capability from the applicants.
- It is also said that the co-borrower but not a co-owner can avail all the benefits of the tax deduction. This is certainly not true. So, when a co-owner as also a co-applicant of the home loan, then the co-owners can easily avail the IT deduction. So, when there are co-owners residing in the property will get IT deduction according to 80C of the ITA. If you are leasing the property out, then you will get a deduction under section 24.
- It is a myth that the home loan protection plan (HLPP) is only issued for the primary borrower. As a matter of fact, it can be done on any joint holder’s name. In a recent case, the couple took a home loan and they thought that the HLPP was issued in the name of the husband. So when the husband died a year later, the wife asked to close the loan. But she was shocked to know that the HLPP was in her name countersigned by her husband.
What most of us do is we don’t read the fine print of the contract before signing it. But it is of utmost necessity that before we opt for a home loan, we should read the contract thoroughly. Only after understanding what the lender is offering in the clauses of the contract, we should sign it. It’s also necessary that those who are going for a home loan should do market research and then apply for a loan. Remember that the home loan is a huge financial commitment and you should be choosing a lender very carefully. The minimum loan tenure is 10 years. And if you don’t really like the terms, then it will be a huge problem.