What are the Pros and Cons of Taking a Home Loan with your Spouse?

Marriage is all about sharing all types of responsibilities, including the financial ones. Nowadays, both husband and wife are earning members of the family. Therefore, sharing financial liabilities like home loans has become easier than it was in the past. When you go on the internet to research about the advantages of co-applying for a housing loan with your spouse, you will find many results. 

You indeed get various benefits when you apply for a home loan with a co-applicant. Moreover, husband and wife are considered as one of the safest pair of co-applicants by the bank due to the longevity of the relations. Here are some pros of taking a home loan with your spouse. 

Increased Eligibility 

As you know that you have to be eligible to get your loan application approved by the bank. Lenders check various factors to determine your housing loan eligibility. Two of the most important of them are credit score and income. 

When you apply for a home loan with your spouse, lenders consider your combined income to determine your financial capabilities. This eventually increases the chances of getting a home loan application approved. Furthermore, it might happen that your individual credit score will be not enough to obtain a home loan of the desired amount. However, while combining it with the credit score of your spouse, you become eligible for that amount. 

Getting a Larger Amount 

The joint home loan amount is always bigger than the loan amount approved for a single person. This is because lending organisations consider both the incomes of applicants to decide their repaying capacities. 

Tax Benefits 

You can obtain tax benefits on the principal repayment of home loan under section 80C and on interest repayment under 24C. Now, when you take a home loan with your spouse and make them co-owner of the property, you can double these benefits. Hence, both of you can save up to Rs. 1.5 lakh under section 80C and Rs. 2 lakh under section 24C. 

Just like every other thing, there are certain disadvantages of taking a home loan with your spouse, such as, 

• If anyone of the co-applicants loose job, the burden of repaying the loan falls on the shoulder of a single person. This can be more difficult because co-applicants usually get the amount that they both can afford. So repaying the EMIs in a single person’s income eventually becomes challenging. 
• In case of divorce, issues regarding ownership of the property and repaying the home loan arise. Moreover, if anyone of the co-borrowers denies repaying, the lenders re-evaluate the eligibility of the individual or ask them to seek a new co-owner. 

If you compare the cons of having a co-applicant in a home loan with the pros of the same, you will notice that the cons are circumstantial. You would experience the adverse outcomes of co-borrowing only under particular conditions where someone has lost a job or got divorced. On the other hand, you get the benefits regardless of any other conditions. In conclusion, it can be said that taking a home loan with your spouse can be a financially savvy move.