Home loan can be applied singly or jointly and eligibility of the loan may increase substantially in case of a joint home loan.
Co -applicant is a person who applies for the home loan along with the primary applicant.
Say for example, if husband and wife apply for the home loan, one person will be the primary applicant and another will be co-applicant. In such cases, banks will examine credit score, income capacity and debts, in any of both the applicants.
Here are 5 must know points when applying for home loan
1) Who cannot be co-applicant?
- Married daughter cannot be a co-applicant with mother or father
- Sister and Brother cannot be applicants in home loan
- Two sisters cannot be applicants in home loan
- Minor cannot be co-applicants
- Usually, bank does not permit friends or relatives to be co-applicant
2) Who can be a co-applicant to my home loan?
- Father and son
- Unmarried daughter and father
- Unmarried daughter and mother
- Brother and Brother
Documents are required from both the applicants. Even the co-applicant need to submit details such as address proof, identity proof and photographs. And income proof of both co-applicants whose income is considered should be provided.
It also gives both the co-applicants of the home loan tax benefits. In fact, you get tax benefits under Sec 80C of the Income Tax Act for the principal amount paid to the tune of a maximum of Rs 1.5 lakhs, while you get tax benefits of up to Rs 2 lakhs for the interest paid on the home loan.
Co-applicant will also be equally liable in case of default. For example, in case of death of one of the holders, the other co-applicant bears the entire responsibility for payment of the balance of the loan.