Home Loan Rules, Home Loan Rules in Hindi | Home Loan Rules : Most of the women are taking home loan, know the benefits of making them co-borrower
Things to consider before taking a home loan (photo istock)
- The average home loan amount for women in FY 20 was Rs 29.78 lakh.
- There has been an increase of 7.41% in FY21.
- Women are being encouraged to join as co-borrowers.
According to the BankBazaar’s Primer on Home Loan Refinancing in 2021, women are taking home loans of large amount. In FY 20 (FY20), the average home loan amount taken by women was Rs 29.78 lakh. In the financial year 21 (FY21), it has increased slightly to Rs 31.98 lakh at the rate of 7.41%. The reason behind this growth is the changes brought about by the pandemic, which has led to people seeking more space and personal space while simultaneously fulfilling their home buying aspirations.
It can be seen that more and more women are becoming borers as many working women have started believing that being the owner of the house is a big priority. Benefits are also provided to women borrowers in the form of incentives to become home owners, including preferential rates on home loans and lower charges on property registration.
In addition, joint home loans are also encouraged. Women are being encouraged to join as co-borrowers (co-borrowers) to avail loans at lower rates, and to enhance the overall loan eligibility for the co-borrowing household. How it helps women to become primary home loan borrowers is briefly discussed here.
Improving loan approval prospects
It has been proved that women are able to manage credit better by making timely and full repayments. Hence, the inclusion of a female borrower or co-borrower increases the chances of getting the loan. A co-borrower with good credentials like a high credit score and stable income can make your loan eligible, and get you approved easily. Co-borrowing also distributes the obligation to repay the loan among all the co-borrowers of the loan. This reduces the load felt by a single borer and also reduces repayment risks.
low interest rates
Women, whether they are primary or secondary applicants, get home loans at lower rates than men. In most cases, this difference can be between 0.05 percent (5 basis points) to 0.1 percent (10 basis points). For example, if a male borrower is offered a home loan interest rate of 6.75% p.a., and if he includes his wife as a co-applicant and makes the property joint owner, then The rate can be reduced to 6.65% per annum. While the difference is marginal, it helps you get lower Equated Monthly Installments (EMIs) and reduces your total interest repayment over the entire tenure of the loan, thereby improving your cash flow. Let us understand this better with an example.
Suppose a male borrower takes a home loan of Rs 40 lakh for a tenure of 20 years. His EMI will be Rs.30,415/- if the rate of interest is 6.75% p.a., and he will pay total interest of Rs.32,99,494/-. If an eligible woman becomes a co-applicant, the lender reduces the interest rate to 6.65% p.a. and the effective EMI comes down to Rs.30,177/- thus reducing the total interest payout to Rs.32,42,531/- She goes. Hence, there is a saving of around Rs.57,000/- in the long run due to a female co-applicant.
As primary applicants, women are given a repayment period of up to 30 years or till they turn 70, whichever is earlier. For men, it can be 20 years or 65 years, whichever is earlier. For example, if the husband is 50 years old while the wife is 45 years old, the bank will give them the option of a repayment period of 15 years only if the loan is applied for by the husband only. But, if he includes his wife as a co-applicant and joint applicant of the property, he will be provided with a loan repayment period of 25 years.
stamp duty fee exemption
Stamp duty is also included in the total cost of acquiring a property. Women home buyers are generally exempted from stamp duty of 1-2 per cent. This means that if the value of the property is Rs 40 lakh, and she can save an amount of Rs 40,000/- to Rs 80,000/- in stamp duty charges.
In a combined home loan, all co-borrowers get an opportunity to claim tax deduction benefits for the payment of interest and principal amount. As per Section 80C and 24 of the Income Tax Act, all the co-borrowers as co-owners of the property, a tax deduction of Rs 1.5 lakh as benefit for the principal amount paid and interest paid and Rs 2 lakh can get tax deduction benefits.
As a primary home loan applicant, the chances of getting a bigger loan increase for a woman. Apart from this, the government also encourages women to get credit linked subsidy through Pradhan Mantri Awas Yojana (PMAY). As per PMAY, it is mandatory to include the name of a woman in the family for registration of property. Also, if a woman takes a loan through this credit-linked subsidy scheme, she can get an interest subsidy of up to 6%.
(The author of this article is Adil Shetty, CEO, BankBazaar.com)
(Disclaimer: This information is being given on the basis of expert reports. Markets are subject to risks, so take your own advice before investing.) (This article is written for informational purposes only. It is for investment purposes only.) should not be construed as financial or other advice)
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