With the rising costs of real estate in India, the dream of owning a home of their choice cannot be fulfilled by many people due to a lack of funds. At such times, a home loan is a very feasible option. Today, owing to digitization, lenders offer home loans at affordable home loan interest rates. With an easily manageable home loan EMI calculator, a borrower can easily customize their loan amount and tenure to suit their home loan requirements.
A key benefit of availing of a home loan is having the option to get a co-applicant to the home loan.
Who is a co-applicant?
A co-applicant is a person who applies for a joint home loan, along with the main home loan applicant. A co-applicant need not be the co-owner of the property,but all co-owners have to become co-applicants to a home loan.
A borrower gets the option of having a co-applicant to a loan. There is no legal requirement to have a co-applicant to a home loan.
Can anyone be a co-applicant for a home loan?
No, as the majority of banks permit only blood relations to act as co-applicants, namely, husband, wife, brothers, parent, and son. Friends and relatives (who are not blood relatives) of the main applicant cannot take a home loan jointly. Sisters and married daughters are not considered co-applicants. Minor also cannot be a co-applicant to a home loan.
The owner of the property will always be the main applicant to the home loan.
Co-applicant rules for Blood Relatives
- Husband and Wife
Husband and wife can apply as co-applicants in a joint home loan, even though the property is registered in either name. To increase the home loan eligibility, the income of the spouse can be included along with the main applicant, though the tenure of the loan gets evaluated based on the age of the older spouse.
- Father and Son
Father and Son can apply for a joint home loan. For determining the home loan eligibility, both their incomes will be considered. If the father has only one son, then the father can also co-own the property.
If a borrower has two or more sons, then the father can apply only as a co-applicant and does not get to share the ownership rights. Otherwise, on his death, the property would get shared among his sons, which could raise a dispute.
- Father and Unmarried Daughter
An unmarried daughter and her father can apply jointly for a home loan. However, the property has to be registered only by one applicant, while the income co-applicant is not to be considered. This helps to avoid any legal disputes on the daughter’s marriage.
Only brothers who are staying together and are co-owners can apply for a joint home loan. A sister and brother or two sisters cannot be co-applicants.
- Mother and son
In the absence of the father, a mother and son can become co-applicants in a joint home loan.
- Mother and Unmarried daughter
Mother and unmarried daughter can be co-applicants. However, the property should be only in one applicant’s name, while the income of the other co-applicant does not get considered for determining home loan eligibility, to avoid legal issues post-daughter’s marriage.
- Father/Mother and Married daughter
Father/mother and married daughter cannot be co-applicants.
Going in for a co-applicant gets the borrower the benefit of higher home loan eligibility. Also, greater tax benefits on home loans are paid as per the Income Tax Act, 1961. However, the co-applicant should have a regular source of income. If the main applicant defaults, then the onus falls on the co-applicant to pay the outstanding amount on the home loan.