Conditions for Becoming a Home Loan Co-Applicant

Even though home loans are usually offered in a “secured” loan arrangement, they are still hard to get, because of their large size and long tenure. This is why many borrowers bring in a co-applicant and take a joint home loan instead.

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Becoming a co-applicant can make obtaining a home loan quite easy. However, you must give it a deep thought because it’s a big responsibility. In a joint loan, you and your co-borrower are equally responsible for its repayment, and if either of you is unable to pay the EMIs at a point down the road, then the other person will immediately come under the bank’s scanner and forced to repay the full amount on their own.

The following are some of the most common scenarios for joint home loans along with the conditions involved:

Husband and Wife

A large number of joint home loans are taken by spouses. However, it’s not necessary for both of them to be the co-owners of the property even when they are both co-applicants. Thus, only one of them can have the full ownership of the house if they like.

When it comes to home loan eligibility, the incomes of both or either husband and wife can be considered. However, in most cases they include both of their incomes to increase the chances of loan approval.

Brothers

Two brothers can apply for a home loan together if they plan to live in the same house. They are also usually expected to be co-owners of the property. This is to minimize the possibility of defaulting.

The combination of a brother and sister or two sisters, unfortunately, doesn’t stand a good chance of loan approval.

Son and Father

A son and father can easily apply for a joint home loan with either of them wanting to the main owner of the property. However, if the father has more than one son, then banks usually insist that the son becomes the main owner. This is because all the sons are legal heirs to the house and after the father’s demise it could lead to legal complications.