Women are becoming more and more financially savvy as well as independent. So they are getting involved in decisions like buying your dream home and getting a home loan for it. And taking Home Loan for Salaried Person with your wife has a lot of advantages.
Let’s talk about the pros and cons of taking out a home loan and buying a house with your wife:
Joint loan gives lower interest rates for women
Most lenders will give you a lower interest rate on your home loan by up to 5 basis points (0.05 percent) if your wife is also an applicant or co-applicant. This means that your interest rate will be lower than the standard rate by 5bps. Remember that the wife must be the owner or co-owner of the property and the primary or co-applicant on the GIC Housing Finance home loan in order to get this special rate.
When two or more people own a property together, stamp duty fees are reduced.
In addition to the slightly lower interest rate on Home Loan for Salaried Person, many people who buy a home with a partner don’t know about this less well-known deduction under section 80C and the discount for women. The stamp duty and registration fees paid when buying the property can be used as deductions, but the total amount can’t be more than Rs.1.5 lakhs for that financial year. Most states lower the stamp duty fees by about 1% to 2% if the property is owned by a woman alone or with another woman.
Remember that you can only claim this deduction in the same year that you paid for the expenses. Also, you won’t be able to take advantage of this deduction until both the building and your ownership of the property are done.
Higher tax breaks: Sections 80C and 24 offer higher benefits
First of all, when taking Home Loan for Salaried Person, keep in mind that you and your wife can only get tax breaks on a home loan if your wife is both a co-borrower and a co-owner of the house. If she is just a co-borrower and not a co-owner, she won’t be able to get tax breaks, even if they pay the EMIs together. Under sections 80C and 24 of the tax code, the couple can claim deductions for both principal and interest payments based on the interest rate on their home loan. But the two people must own the property together and pay their share of the EMI payments.
Also, since many homebuyers take out a home loan to buy a property that is still being built and won’t be finished for a while, but the EMI payments on the home loan start as soon as the loan is taken out, even these borrowers can claim a tax deduction under Section 24b for the interest paid during the pre-construction period at the interest rate for Home Loan for Salaried Person. You can do this for up to five years (in 5 equal instalments). But keep in mind that even with this, the most you can claim is still Rs 2 lakh per year, which includes interest payments for both the pre-construction and post-construction periods.
When it comes to paying off the principal, you can deduct up to Rs. 1.5 lakhs per year. When it comes to paying off the interest, you can deduct up to Rs. 2 lakhs per year. Couples can each claim the deductions that correspond to how much of the property they own. Don’t forget that the total amount of claims cannot be more than the total amount of principal paid back during that year.
Also, last year’s budget for 2021 said that home loans given between April 1, 2019, and March 31, 2022, will get an extra interest deduction of up to Rs 1.5 lakh under the affordable housing programme. It could be used for GIC Housing Finance home loans that are taken out until March 31, 2022. And in order to get a tax break under Section 80EEA, you have to be a first-time home buyer, and the value of the home can’t be more than Rs 45 lakh.
In what situations can your wife apply with you?
A wife must own or share ownership of the property.
The wife can be the main applicant or a co-applicant for the home loan if she is the owner or co-owner of the property. Even if she doesn’t have a job, she may still be able to be a co-applicant if she owns the property with the main applicant.
The wife’s earnings and income were taken into account when deciding if the GIC Housing Finance loan was eligible and if the borrower could pay it back.
Your wife can also be a co-applicant on the home loan if she has a job and her income was taken into account when figuring out if the joint loan was eligible and if you could pay it back. Many times, the husband’s application for a GIC Housing Finance home loan is turned down because he doesn’t make enough money or has a low credit score, among other things. If this is the case, adding your working wife as a co-applicant can make it more likely that the loan will be approved. But keep in mind that this is only possible if the lender finds your wife’s credit score, income, debt-to-income ratio, etc., to be satisfactory when deciding the home loan interest rate for the joint loan application.
Who else besides the wife can be a co-applicant?
When you co-sign on a GIC Housing Finance home loan, you have to follow a set of rules that vary from lender to lender. There is no one hard and fast rule. Most of the time, lenders will only accept a small number of family members as co-applicants on a Home Loan for Salaried Person. These include father, son, mother, daughter, spouse, sister, and brother. All of this, though, depends on the home loan lender’s own rules and regulations about who can be a co-applicant based on their list of valid relationships.