I have taken a joint loan with my wife. Is it mandatory to include her name in the registration?
– TS Sundar
It is not mandatory to include your wife’s name in the property registration if it is a joint home loan. It is completely at the discretion of the home loan applicant whether to mention the name of the co-applicant in the registered sale deed. However, if your wife would like to avail of tax benefit on the home loan, then you will have to include her name in the sale deed.
Is it a good idea to increase the EMI every year to reduce the interest outgo?
You can increase your EMI amount every year by a certain percentage depending on your cash flows. But rather than increasing the EMI, you could make a part payment of a certain amount each year. This will not only reduce your EMI but will also reduce the principal amount thereby reducing the interest outgo on each EMI.
I have paid EMI for 12 years on my 20-year home loan without any pre-payment. Now I want to do some pre-payment. Will it be beneficial?
Every time you make a part pre-payment towards your loan, the amount goes towards repaying the principal outstanding of the loan. As the principal amount you owe reduces, so does the interest amount. So, if you have even a small surplus, you should repay the principal part of the home loan. However you should do a benefit analysis with respect to the income tax benefit that you would get on account of interest and principal paid towards the home loan. Prepayment of the loan is likely to reduce the benefit amount since you have already paid for over 12 years.
Since I have a good credit history and have never defaulted on any payments, can I bargain for a lower interest rate for my home loan?
While a good credit score is one of the most critical factors for the lender to ascertain home loan eligibility, it is not the only criteria. There are various other factors such as nature of profession, stability in the job or business, steady income, credit history and current liabilities. on each EMI that you would have to pay to the financial institution.
The writer is JMD & CEO, DHFL.
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