Joint home loan is one of the best financial products by lending institution to hedge their mortgage risk. Most of the lenders insist on joint home loan these days, even if the property to be pledged is bought in a single owner’s name. The key advantage of taking this loan is the home loan tax benefits and the other thing that is quite interesting, adding your earning or non-earning spouse as a co-applicant. If you “Apply For Home Loan“ jointly, it makes your repayment capability higher. As every cloud has a silver lining, so do the joint home loan. Let us understand the pros and cons of this loan which are mentioned below:

Advantages of Joint Home Loan

♦ Higher loan quantum: You can apply for loan jointly with your partner, siblings or children to get your loan quantum increased substantially. Every lender sees the borrower’s net monthly income and then finalizes the loan money to be disbursed. Usually, the lending institution would offer a loan on which the monthly installment could be as high as half of the monthly income.

♦ Tax benefits: If your co-applicant is co-owner of house with you, then you can both claim the tax benefits. There is deduction from the taxable income on both the principal repayment as well as interest to be paid, hence, bringing down the overall tax liability of borrowers. Therefore, a home loan jointly allows co-applicants to double the tax deduction benefits from a single housing loan.

♦ Flexible repayment: If you are applying for home loan jointly, it is not necessary that both the applicants have to repay equally towards the principal amount and interest payment. It entirely depends upon the borrower to decide how much each of the borrowers contributes towards EMI.

Disadvantages of Joint Home Loan

♦ Delayed Documentation: As the two applicants “Apply For Home Loan Online“ or offline, so lender will take more time to complete the documentation check. This time lapse occurs as authorities take longer time to ensure that documents submitted by applicants are genuine and not forged. The entire process of document verification is repeated two or three times depending upon the number of co-applicants who have applied for loan.

♦ Impact on CIBIL score: As the joint home loan gives you the advantage of flexibility on repayment but it also have a disadvantage because if any of the two applicants defaults on repayment then the credit score of both of the borrowers would face the brunt as any default on the EMI could negatively affect your credit history.

♦ Divorce or Demise: In case if the co-borrower decides to move out of a loan due to divorce then it is the responsibility of first applicant to repay the whole loan. In other case, if one of the co-applicants passes away then the surviving spouse have to take the charge of repaying the entire loan amount. It is advisable to avail separate life insurance policies to decrease the financial load on one applicant in case of demise or separation.

It is very discouraging when your home loan application gets rejected. Let’s take a look at which could have possibly gone wrong rather than to dwell on failures. If your application has got rejected then learn from this experience as it will help you to identify aspects of your expenses that need inspection and improvement. Try to recognize your financial activity, such as delayed payments and eradicate them immediately. Being rejected for once doesn’t mean that you will never be approved. Let’s go through some reasons why your “Home Loan“ got rejected by the lender.

Unsatisfied Credit Report: Every lender considers your credit report as a reliable decision making tool before lending you the amount. Your credit report is consisted of missed or delayed card payments, previously loan applications and multiple loan applications. Therefore, such factors damage your credit worthiness. A low CIBIL score is the primary reason for the “Rejection of Home Loan Application“.

Insufficient Income: Unstable employment or changing too many jobs affects your loan application. Many lenders take your application on account if borrower has two years of constant employment. You need to have hand in valid proofs of working years to the bank or lender. The other factor is your income size, if your payment is too small, lender may not be willing to accept your loan request. It is good to start saving early as buying a home is one of the biggest investments.

Incomplete Paperwork: it is evident necessity for any loan application to submit updated and valid documents. In case of false submission, your application will not be processed. Lenders or bankers may look out for a clear track record of your ITR filings of the last two or three years before approving your application. Ensure the lender by providing accurate, complete and updated list of assets and finances to get the loan approval.

Pre-Existing Loan: Having too many loans in your pocket can leave the lender with a sense of uncertainty about one’s financial decisions. A lender will decide to approve your loan request after reviewing your income-to-debt ratio. If you are already donned with one or more existing loans, your liabilities should be greater than income to get the loan. Don’t be deterred by this and make a wrong decision.

Improper Asset Documentation: The rejection doesn’t always depend upon the applicant’s shortcoming, but sometimes, the value of the property may not be able to match the amount applied for. The high demanding properties have good resale value and a stable price whereas lenders do not prefer funding building older than 15 years.

If you are planning to get a Home Loan, enjoy the lowest interest rates and instant approval with zero paperwork at ShubhBank. If you are on the lookout for the online loan option or any other financial tool, you should take a tour on our website and take your pick. Now you know all about the factors responsible for loan rejection, it’s time to be aware of them.