All About Joint Home Loan – How to take and who can apply

Joint home loans avail an eligible applicant for higher loan amount and sharing of the financial burden. There is a primary applicant the other is known as a secondary applicant. A joint home loan allows both the borrowers to get tax benefits.

In case of home loans usually husband and wife jointly share the home loan responsibility. But other than this relationship, getting a home loan could be a bit tough task due to the restrictions placed on joint loans. Succession and inheritance laws are the primary causes. Disputes might take place between legal heirs, in case where one of the property co-owners passes away.

The banks specify the situations in which relatives can be co-applicants for a home loan application. Different relationships are treated differently when it comes to allowing a joint loan-

• Brother and Sister/ two sisters: Due to the succession and inheritance laws, approval is not usually granted to loan applications by a brother and a sister or two sisters.
• Brothers: At the time of applying for the home loans if the brothers share the same residential address, they can apply jointly and their application will be considered by the lender. If they are applying for a new house, the same rules apply and they should be co-owners at the same time. When there are two separate floors occupied by two brothers, the application is considered just like for independent houses. 
• Parents and Son: Both the parents and the son must be the co-owners of the house property. The son should be the only child in such a case. In absence of siblings, there is no question of any succession or inheritance disputes. Where there is more than one successor, the chances of the loan getting sanctioned are less. But if the son is the owner of the property and one of the parents is applying to increase the eligibility of the loan, the loan has a higher chance of getting passed. 
• Parents and Daughter: In case a married daughter applies jointly with one of her parents, the lenders will not consider it. The reason being, the legal heir of the married woman is her husband along with her other siblings.  Whatever share she holds in the property is seldom material. But where a daughter is unmarried and she is the only owner of the property, then either of the parents and daughter can jointly apply. There are two public sector banks that consider such loan applications.
• Joint loan with a friend: Only parents, siblings and spouses are allowed to take joint loan.
• Joint home loan with wife: Up to 20 years’ tenure the borrower can share the home loan with his earning wife. Both of them get tax benefits and the stamp duty is less where wife is the applicant. If the wife is non-working there are no benefits of taking a home loan jointly with her however, a few banks lower the stamp duty and the interest rates for women. 

Though lenders stick to the rules and do not allow anything other than the set standards, there could be instances where they give approval, depending upon each case. Over and above the succession rights, the lenders look for the stability of the home loan to secure it in the long term. 

The lender could ask for extra paper work to avoid any succession and inheritance related issues. At times more co-applicants are required.  Usually married applicants are required to have their spouses as co applicants and single applicants should bring in their parents to seal the deal. The bank can ask for making all legal heirs as co owners in the property in a case where the father and a son are applying jointly. A no objection certificate by the other legal claimants can be asked for to avoid the disputes later. The son who is the joint applicant with father will become the righteous person to own the property in case of death of the father.  

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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