Home buying is certainly not a one person’s cup of tea especially in today’s time when everything from living cost to property prices are witnessing a high. Thus, every aspiring homebuyer requires financial support and only a co-borrower can only extend help in this case.
Hence, we are letting you know all the details such as the eligibility for being a co-borrower.
1. Eligibility Criteria for being a Co-Borrower
Spouse – He/She is first considered to be a co-borrower as the home expenses are shared by the partners equally and thus one out of them can share the additional cost of an equated monthly installment i.e. EMI.
Children – The little bundle of joy who are actually grown up and are earning now can help you with property purchase. You can share the home loan cost with the adults who were once a tiny tot.
Parents – The parents are the one to whom we all look upto and they can offer financial backing by being a co-borrower.
Age – This factor is likely to work negatively as the lenders only take the remaining earning years into account. The retired parents cannot be the co-borrower.
Daughter – The daughters might find it difficult to be a co-borrower as the married daughters are not considered for this role due to the uncertain amount she can give to the parents.
Son – This is a positive equation but the lender prefers to make him the first buyer as it secures the regular payments of the home loan.
2. Non-Eligible Contenders for being a Co-Borrower
Siblings – This blood relationship stands null and void in case of the co-borrower application. However, the lender can consider the application if the standard marriageable age of both the borrower and the co-borrower applicants have passed. Also, siblings can become eligible for a joint home loan in case they can convince the lender about sharing the burden of house expenses.
Live-In Partners – These people are no committal in the eyes of law particularly when it comes to borrowing a loan. Another reason to deny a joint home loan to the live-in couples is the relationship status that can be terminated at any given time and this outcome will make the bank suffer due to irregular deposition of the loan EMIs.
Friends – These are the most close and precious relationships in the world. But, unfortunately emotions are not counted when it comes to financing. The two different people, different living address and family backgrounds restricts the bank from sanctioning joint home loan to the friends.
Although, it is least possible to expect a positive outcome of a joint home loan application.
3. Tax Rebates for Co-Borrowers
The Co-borrowers might not be the property owners but they can avail tax rebates. All the tax benefits that are defined for the home loan borrowers can be taken by the co-borrower also. The only difference is the contribution ratio, means you can enjoy the percentage of tax benefit that equals the loan contribution amount made by the co-borrower.
The co-borrower can avail the tax benefit similar to that of the borrower.