When you apply for a loan against property there are many factors which determine your eligibility and there might be chances that you don’t get a loan for the amount which you wanted. Let’s say you wanted a loan for Rs 50 lakh but looking at your property and income, the lender decides to provide you with a loan for Rs 35 lakh. You are short Rs 15 lakh, in such a case you can apply for a loan against property with a co-applicant.
Who is a co-applicant?
A co-candidate alludes to an individual who applies alongside the borrower for a credit. This is done with the goal that the salary of the co-candidate can be utilized to enhance the borrower’s pay and increment his/her qualification.
Who can be a co-applicant to my Home Loan?
Everyone cannot be a co-applicant for a home loan. Only a few relations are allowed to apply jointly for a mortgage loan, the relations are specified by Banks and Housing Finance Companies (HFCs)
- Father and son
A father and son can apply co-jointly for a loan against property. But there are few things to be kept in mind. If the borrower is the only son then he can apply with his father, where his income will also be taken into consideration and property against which loan is taken should be in the name of both. If a borrower has two or more son, then the property should be in their name if the borrower decides to make both them co-applicant. Property should be co-jointly owned by both the sons as children should succeed the property.
- Unmarried daughter and father
An unmarried daughter can apply co-jointly with her father. But in this case, the property has to be in the name of the daughter, this is to avoid the legal complications if the daughter gets married. In such a case income of father is not considered.
- Unmarried daughter and mother
An unmarried daughter can also be a co-applicant with her mother. In this case, also the property has to be in the name of the daughter, this is to avoid the legal complications if the daughter gets married. In such a case income of father is not considered.
- Brother and brother
If brothers are staying together then they can apply for the loan co-jointly. In this case, the income of both the brothers will be considered for eligibility.
- Husband and wife
Husband and wife can apply for a loan against property co-jointly, in this case, the income of the applicants will be considered to determine the eligibility. Most the banks easily to sanction the loan to husband/wife as co-applicants. Even both of them can enjoy the tax benefits.
Factors That Can Affect Your Loan Against Property
- Individual income can affect the amount of loans banks, and financial institutions may lend. Higher-income attracts a higher amount of loan.
- The eligibility of loan against property is determined based on the value of the property. The value of the property is determined by market value, condition and location of the property.
- Credit score defines the creditworthiness of an individual. It also has a bearing on the loan against property, Higher the credit score better the chances of loan against property and vice versa, Further individuals with high credit score may also negotiate the terms of the loans. An ideal credit score is above 700.
Things to remember
- Co-applicants can also be the co-owners of the property.
- It is not mandatory to consider the income of the individual whose property is pledged against loan unless one wants to increase the loan amount.
- All the directors and partners must act as co-applicant if a company or a partnership is going to be offered as LAP
- Head of a joint family must be the co-applicant for a LAP.
- The minimum age and the maximum age of the co-applicant must be at least 23 years and a maximum of 60 years
- If the income of the co-applicant is not going to be considered, the minimum and maximum ages are 18 and 80 respectively