In the past few decades, we have witnessed the continuous rise of women as leaders across all fields, whether it’s about heading an MNC, government organization or even leading the nation as President or Prime Minister. The growing literacy and changing mindsets have resulted in women increasingly gaining financial independence as well. With this, the rise of dual-income families has also been there.
Hence, when it comes to taking big financial steps like applying for a home loan from PNB Housing Finance, women participation has become common, also because of various benefits associated with it.
If you, too, are amongst those contemplating the thought of including a female co-applicant in your home loan application to be submitted to HFCs like Reliance home finance, keep these six factors in mind for a smooth road ahead.
Female applicants should be co-owner of the house property.
When applying for Reliance home finance, remember that the woman co-applicant can be accepted as primary or co-applicant of the home loan if she is either the sole owner or co-owner of the concerned house property. Even if the female co-applicant isn’t earning, she is likely to still be considered eligible to become a co-applicant if she is into joint ownership of the involved house property for which a home loan is being taken.
Factoring in of female co applicant’s income ineligibility
A woman can become the co-applicant of your home loan if she earns and her income has been considered by the lender while evaluating the joint loan’s eligibility and the overall repayment capacity. Also, more often than not, the chances are that your PNB Housing Finance application can get rejected due to multiple reasons like failure to qualify for minimum income criteria, low or no credit score, risky job profile etc.
For improving home loan approval chances in such cases, adding an earning female co-applicant can turn out to be helpful. But remember that this is possible only if your female co-applicants credit score, income, etc., are deemed satisfactory as per the qualification criterion of the lender while evaluating the eligibility for joint loan application.
The benefit of lower home loan interest rate with female co-applicant
Whenever you take a joint home loan with your female co-applicant, like wife or mother being the co-applicant, a lot of banks and HFCs would offer a lower rate on PNB Housing Finance by up to 5 basis points (0.05%) v/s the applicable interest rate for others. Note that, in order to avail this concessional rate, the lenders can put forth the condition of female co-applicant to be the co-owner of the property, besides also the co-applicant of home loan.
Concession on stamp duty charges in case of joint ownership of property
Apart from the benefit of lower rates on Reliance home finance, many homebuyers planning to jointly purchase property can avail a deduction on stamp duty charges available under section 80C of the Income-tax Act and also the concession available to women. Simply put, the stamp duty charges, as well as registration fees which are paid at the time of purchasing the property, are eligible to be claimed as deductions, with the claim amount being capped at Rs.1.5 lakhs for a financial year, under section 80C. As far as concession is concerned, many Indian states provide around 1%-2% lower stamp duty charges if the property is solely or jointly owned by a woman.
But, note that you have to claim this deduction in the same year in which such stamp duty and other expenses were incurred.
Higher total benefits on tax deductions
Never miss out on the fact that you, along with a female co-applicant, can claim tax benefits on PNB Housing Finance only when the female co-applicant is both co-borrower as well as co-owner of the house.
So, if she is just the co-borrower and not the co-owner, she can not claim tax deductions even if she is sharing the payment of EMIs. Also, you and the female co-applicant are entitled to separately claim the tax deductions on principal as well as interest payments on the applicable home loan taken from Reliance home finance, under sections 80 C and 24, respectively. But the co-applicants have to be joint owners of the house property and also contribute their respective share towards the EMI.
When it comes to the tax benefit on principal repayment, it can be availed up to Rs.1.5 lakhs per year, whereas interest repaid is eligible for a maximum deduction of Rs.2 lakhs per year. Co applicants of PNB Housing Finance can separately claim the deductions corresponding to the ratio of their ownership of the property.
Moreover, as per last year’s budget announcements, an additional interest deduction of up to Rs 1.5 lakh has been granted under affordable housing for home loans sanctioned between 01.04.2019 and 31.03.2022. This has been no less than a big impetus to housing for all missions of the government.
Also, in order to qualify for tax deduction under section 80EEA of the Income Tax Act, you have to not only compulsorily be a first time home buyer, but even the value of the house property has to not exceed Rs 45 lakh.
Who can all be co-applicant for a joint home loan?
Approval of the addition of a co-applicant when submitting a home loan application to Reliance home finance is subject to the applicable set of terms and conditions that vary from lender to lender, without any particular hard and fast rule.
Banks and HFCs mostly tend to accept only some relations as home loan co-applicant, like immediate and/or blood relations including son, father, mother, daughter, spouse etc.
But what you need to keep in mind is that all this entirely depends on the home loan lender’s own set of conditions pertaining to the setlist of valid relations, which can be accepted/approved as co-applicant of home loan. So check with the concerned lender before taking a joint home loan with any co-applicant so that your home loan application does not get rejected later.