All You Need to Know about Becoming a Co-Applicant in Home Loan!

If you have ever planned to avail a housing loan, you might know about the concept of a joint home loan. Through a joint loan, you can have a co-applicant and reduce your repayment responsibility. However, many housing loan buyers have little or no knowledge about having or becoming a co-applicant. One must be aware of all the aspects of becoming a co-applicant to avoid any inconvenience in the future.

In case you are planning to apply for home loan, go through this guide on all that you should know about becoming and having a co-applicant for a home loan.

What Is a Co-Applicant?

An individual who avails a home loan with the primary applicant is called a co-applicant.

Who can be a Co-Applicant in a Home Loan?

There are certain restrictions on having and becoming a co-applicant for a housing loan. The following can take a joint home loan:

• Spouse

Husband and wife can take a joint home loan. The loan can be in the name of either of the two. Usually, the lenders prefer this pair for a joint loan. The income of both the applicants is added to determine the eligibility.

• Parents

A son can be a co-applicant for a housing loan with his parents. If he is the only son, the property should be jointly in the name of both the father and the son. If the father has more than one son, all the sons can be co-applicants in the home loan. However, the father should not be the primary applicant instead, the property should be in the name of the sons. This is done to avoid any disputes in future related to the property’s ownership. An unmarried daughter can be a co-applicant for a joint home loan with her parents. However, the property should be in her name, and the parents’ income should not be considered.

• Siblings

Two brothers can avail a joint home loan provided; they are staying together and continue to do so in the new property.

• A minor cannot become a co-applicant.
• People with no blood relation cannot be co-applicants in a home loan. Therefore, you cannot become a co-applicant for a housing loan with your friends or relatives.
• A married daughter cannot take a joint housing loan with her parents.
• Similarly, two sisters cannot be co-applicants. A brother-sister duo cannot be co-applicants either.

Liabilities of a Co-Applicant

A co-applicant is equally responsible for the housing loan as the primary loan applicant. He/she is liable to pay the EMI on time and penalty in case of late payments. Technically, a co-applicant is also a co-borrower and so, liable for the repayment and other loan charges. The lender can pursue the co-applicant(s) for the loan if the primary applicant dies, defaults or refuses to repay.

Bottom Line

When you apply for home loan, there is no legal requirement of availing a joint loan; however, adding a co-applicant has various benefits. Having a co-applicant enhances the home loan eligibility, and this boosts the chance of loan approval. It also helps the co-applicant(s) to avail tax deductions. However, becoming a co-applicant comes with its challenges and liabilities. Therefore, you must carefully study the loan agreement and become a co-applicant only with a borrower who has sound creditworthiness.