After availing of a home loan with a co-applicant, you may want to modify the loan arrangement. Perhaps your co-applicant no longer has a good credit score and has accumulated several debts since you entered the agreement together. Whatever be the reason, you can always volunteer to take their name off the loan obligation.
To learn more about who a co-applicant is and how to change or add a co-applicant to an existing home loan, read on.
A co-applicant is an individual that agrees to apply for a home loan alongside you. You serve as the primary borrower while they are the secondary borrower. You may require a co-applicant if you cannot repay the Equated Monthly Instalments (EMIs) on the desired home loan amount alone.
Adding a co-applicant to a home loan application makes lenders more likely to approve your request. Also, you can avail of high loan amounts with a co-applicant. However, before selecting a co-applicant, you should ensure they have a high repayment ability plus an excellent credit score. If they have a poor score, you will be rejected even if you have a good score.
If you want to change the co-applicant in your home loan, here are some important steps to follow:
To begin, you must contact your lender and request a novation. A novation refers to a declaration of a shift in the responsibility of loan repayment. This means that you’re the sole proprietor of the loan and will pay the EMIs yourself.
However, you must first read the lender’s terms and conditions carefully before doing this, as not all lenders approve of it.
Lenders require that you convince them on why you want to switch co-applicants. Most lenders will request evidence, so be prepared.
If your reason is that the co-applicant has a poor credit score, then provide documents backing your claim. If they cannot afford the repayments due to a change in their income situation, then you will need to provide their recent salary slips to support your claim.
You need to prove to your lender that you can underwrite with the EMI payments without a co-applicant. No lender likes missed payments, so they will ask that you provide certain documents to support your repayment ability.
These documents include recent salary slips and bank account statements. Providing these documents boosts your chances of changing your co-applicant.
A home loan remains a great opportunity to buy the home of your dreams. Bajaj Housing Finance offers excellent joint home loan deals. If your income is not high, you can apply for our joint home loan with a co-applicant.
We promise high-value loan amounts, flexible repayment tenors, and much more. Click here to apply for a home loan now.
Yes, it’s possible to change the co-applicant in a home loan. You can do this by requesting a novation and providing the necessary documents to aid your request.
Yes, a co-applicant can avail of another home loan if they have a high repayment ability. They also need an impeccable credit score to stand a chance of getting approved.
Simply request a novation from your lender and include the co-applicant. To guarantee success, follow your lender’s instructions for the novation.
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Last update on 11-Mar-2021
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