While you can’t get a Home Loan in your parent’s name, you can certainly add them as a co-applicant on your own loan application. Similarly, you can also apply for a Home Loan in their name and then add yourself as a co-applicant. In both cases, the responsibility of repayment of the Home Loan will fall equally on you and your parents.
A Home Loan is an easy and convenient way to buy a house - you can borrow the amount you need and repay it in a stress-free manner by opting for a tenor that works best for you. However, borrowers get approved for a Home Loan only when they meet their lender's eligibility criteria.
In case a potential borrower fails to meet these eligibility criteria, their loan application gets rejected. In this scenario, one of the easiest ways to enhance one's Home Loan eligibility is to add a co-applicant with a good credit score and a stable source of income. This co-applicant could be your spouse, siblings or parent. Before we give you more details on how you can add your parent's name to your Home Loan application, let us first understand who a financial co-applicant is and what their responsibilities are.
Who is a financial co-applicant in a Home Loan?
A financial co-applicant is someone whose name appears with that of the main applicant in the Home Loan application. Borrowers should know that a co-applicant can be a co-owner, but a co-owner is always a co-applicant. Further, only co-owners serving as co-applicants can claim Home Loan tax benefits.
So, if your parents are working but are only co-applicants in your Home Loan application and not co-owners in your property, they won't be able to claim the Home Loan tax exemptions available. Further, if you add a parent as a co-applicant, know that they will be equally responsible for paying Home Loan EMIs.
If you are planning to add your parent as a financial co-applicant on your Home Loan application, there are a few things you should keep in mind:
• If your parent is employed and has a stable income, the lender will include their income while calculating the maximum Home Loan amount you are eligible for.
Similarly, their age will also be taken into consideration while calculating the tenor for this joint Home Loan.
• If an unmarried daughter applies for a Home Loan with her mother, the income of the mother is not considered. Further, the property should be in the daughter's name so that there are no issues regarding ownership once the daughter gets married.
*Terms and conditions apply.
