JAGOINVESTOR

Joint Home Loans – The Pros, Cons and Myths!

Posted on November 15, 2018November 18, 2019 by Jagoinvestor

Buying a house isn’t easy today if you are living in a metro city like Mumbai, Pune, or Delhi. It’s nearly impossible to pay the full price of a house unless you have massive savings or an existing real estate that you can resell. This is the reason why most people take home loans, or rather joint home loans.

joint home loan

What is a Joint Home Loan?

As the name implies, a joint home loan is a home loan that you take with another person, who is usually your spouse or a sibling. There are many reasons why people avail of joint home loans instead of standard home loans, one of which is bad credit.

Let’s understand why.

No matter what kind of loan you apply for, the lenders always check your credit report to assess your creditworthiness. This a standard practice to reduce the risk of non-performing assets. So, if your credit report looks fine which means that you don’t have a history of late payments, loan defaults, etc. and your credit score is high, then you can avail a loan easily.

However, if that’s not the case, not all hope is lost as an alternative option exists! That’s when you can get a co-borrower to take a home loan with you. If their credit score is good, then it can balance yours and make it easier to get your loan approved.

People also take joint home loans when they aren’t capable of repaying the full amount on their own. By dividing the loan’s burden with their spouse or a family member through a joint home loan, the debt can be repaid easily. Now that you know what a joint home loan is, let’s take a look at some of the major pros and cons of the same.

Pros of Joint Home Loan

The chances of getting a home loan at attractive interest rates are much higher in a joint home loan compared to the regular home loan.
You can get larger amounts in a joint home loan that can help you afford an expensive property.
As per the income tax regulations, joint home loans allow both co-borrowers to claim tax benefits under Section 80C. They each can deduct up to 2 lakh INR from the interest amount and 1.5 lakh INR from the principal amount from their taxable incomes.
If you are unable to get a home loan due to poor credit score, then a joint home loan can be your best bet.

Cons of Joint Home Loan

If your co-borrower in unable or simply refuses to pay the EMIs, then your credit report apart from theirs is affected.
Joint home loans can raise all kinds of legal problems if the co-borrowers are married to each other and get separated by divorce even as home loan remains to be repaid. If the property is registered in the name of one co-borrower, then after the loan has been fully repaid, he/she will become the rightful owner even if the other co-borrower has also paid their share of the EMIs.

Common Myths About Joint Home Loans

A joint home loan is a massive financial obligation. Apart from the huge EMIs that are particular to these loans, the tenures are not lesser than 15 to 20 years which means you pay the EMIs for a large portion of your life. Thus, it’s a good idea to do extensive research before you finally start submitting applications for a joint loan.

It would help if you also were wary of some of the most common myths about joint home loans that mislead borrowers:

Myth #1: A Co-Applicant is Required Just for “Formality.”

A co-applicant is as much responsible for a loan’s repayment as the primary borrower. In other words, signing on the dotted line imposes legal and financial obligations which is why it’s strongly recommended that both co-applicants read the fine print and ask as many questions as they need until they have a good understanding of the agreement they are about to enter into.

Myth #2: Only One Co-Borrower Can Receive Tax Benefits

People think that in joint loans, only one of the co-borrowers can receive tax benefits. However, this is further from the truth as both co-borrowers are equally entitled to these benefits. This means that you and your co-borrower both get to enjoy lower individual taxable incomes. That said, you must know about Section 24 of the Income Tax Act which sheds light on taxation in joint loans.

As per Income Tax guidelines, a co-borrower can claim tax benefits only if he/she is also a joint owner of the property. This clarification is important because many times, people take joint loans to increase the loan amount and make the process easier. However, merely being a co-borrower doesn’t make you eligible for the tax benefits. You must have ownership rights over the property as well.

Myth #3: Roping in a Co-Applicant is a Sure Shot Way of Getting a Home Loan

It’s true that it’s easier to get a home loan with a co-applicant compared to when you apply just by yourself. However, there is no guarantee that you will get approved for a loan. This is because home loans are highly risky for the lenders, even if they are secured against the homes they are availed for.

So, a co-applicant can’t help with the application if they don’t contribute to your “creditworthiness”. In other words, a co-applicant can make it easier to get a home loan only if their credit score is high and their income big enough to cover the EMIs.

Failing to Prepare is Preparing to Fail!

Joint home loans have their pros and cons as explained above. However, there are many other factors that you must consider including the interest rates, income, financial projections for the future, and buying a new home vs. an old home. After all, once you borrow money from a bank, there is no turning back. So, take your time and pick the right loan at the right time. Good luck!

His journey from 0 to 1000 crore (What you can learn from Master Equity Investor?)

Posted on November 10, 2018November 18, 2019 by Jagoinvestor

The article is close to my heart.

In the article, there are no tips and tricks on how to make 1,000 crores overnight. The article is about engaging with some powerful questions and not trying to find an immediate answer to create wealth.

The article is not about creating crores, it is about shifting your focus from markets to learning from the master investors- All I want is a shift in your mindset. Markets will continue to rock, your only job is to work on your mindset to create massive wealth.

How Investors should think when markets correct?

Right now a lot of investors, advisors and mutual fund companies are focusing only on the market volatility, Fall in NAV, portfolio return, some think markets are like a bloodbath, some are in the mood of stopping their SIP, some are in the mood of redeeming money, sharp corrections, on the other side mutual fund companies and advisors are asking investors to stay patient with their investments and encouraging them to invest more.

In short, some are positive and some are extremely negative about the situation we are into.

But……

There is very little focus on how master investors think when markets correct. There is very little focus on inspiring the wealth creation journey of master investors. There is very little focus on how successful or master investors behave and act during market turbulence. We all start from zero and it is important to think and observe winning or master investors as we continue to walk on our journey of wealth creation.

Wealth Creation Journey of Mr. Ramdeo Agarwal

In the personal finance world, I have many teachers, there are many master investors from whom I continue to learn and get inspiration from. I am always like Eklavya, who keeps learning from different teachers from a distance and I will always continue to learn and absorb the maximum I can.

Mr. Ramdeo Agarwal is the Co-founder of Motilal Oswal group of companies, his journey of wealth creation transformed after meeting his mentor Warren Buffet. I never miss to read his wealth creation studies and there is not a single YouTube video I have missed in which he has featured.

I got an opportunity to be in the same room with Mr. Ramdeo Agarwal Ji in the US, my friends took a picture with him but I did not. I was having thoughts like, let me first do something amazing in life, let me create immense wealth using equity as a vehicle, let me help others to get wealthy by educating them on equity investments.

I should perform as a student first and earn the privilege of sharing a photo with him.

The POWER Questions I engage with about my teacher ( Mr. Ramdeo Agarwal Ji) are?

How does he (Mr. Ramdeo Agarwal) create wealth?
How does he maintain his conviction in the equity market?
How he stays on the court, no matter where the markets are?
How does he build his business empire around equities?
How does he stay so consistent with his investments?
How does he deal with losses in his portfolio?
How does he feel when he makes huge profits?
How does he stay committed to the process of wealth creation?
How does he practice the power of compounding in his day to day life?

Initially, I was busy to get answers to the above questions but after hearing and reading about Mr. Ramdeo Agarwal and his style of investing I came to know that the real secret is not in getting the answers, the real secret is in staying engaged with the questions, it is about staying engaged with the journey of wealth creation. It is about having your own investment philosophy, it is about allowing the power of compounding to do its work.

It is about finding your own process of wealth creation and keep refining it. It is about doing something over and over and over and over again and if something does not work for you, you make changes in your process and continue to move forward in your journey of wealth creation.

Most newbie investors feel and think that master investors have something SPECIAL in them, they do something special to create wealth, they have some special knowledge or special skills. In reality, the only thing special about them is they do not look for ANYTHING special. They master consistency, repetition and stay focused on their path. They won’t allow any kind of outside noise to deviate them from their journey of wealth creation.

I invite you to read the pdf if you have read it before I invite you to read it once again. The PDF is old by now his personal net worth must have crossed a few more thousand crores. While you read to keep the above questions in front of you, do not look for special qualities or some special information from the pdf. From time to time we will continue to share other master investors from whom we can learn and inspire from.

Teacher and His Meditation Student:

Lastly, I want to leave you with a conversation, a student had with his meditation teacher.

A student went to his meditation teacher and said, “My meditation is horrible! I feel so distracted, or my legs ache, or I’m constantly falling asleep. It’s just horrible!”

“It will pass,” the teacher said matter-of-factly.

A week later, the student came back to his teacher. “My meditation is wonderful! I feel so aware, so peaceful, and so alive! It’s just wonderful!’

“It will pass,” the teacher replied matter-of-factly.

The market correction will pass away!

You have the power to create massive wealth

You really have the power to create massive wealth, almost everyone starts from zero or from a scratch and on one fine day they become an inspiration for others. Choose to be an inspiration to others, the article is not about Mr. Ramdeo Agarwal Ji, or how much money he has made.

It is about learning from the master investors and taking your financial journey to the next level. Create your financial journey more meaningful, stick to your mission of wealth creation and if that’s the game you will never bother where the markets are going. You will see every situation as an opportunity to create wealth.

Invitation: Check your Financial Health score?

(Check if you are capable to build Rs.1000 crore net-worth or not?)

Invitation to Check your Financial Health Score: During Diwali everyone gets HIT by the euphoria of shopping and buying new stuff, we invite you to check your financial Health score this Diwali, all you need to do is leave your details in the below link and my team will help you to check your financial Health score out of 100. After checking the score you will gain clarity on areas which are not working and areas which call for your immediate attention.

What happens after the death of bank account holder?

Posted on November 26, 2018December 27, 2018 by Anuradha Singh

What happens to the orphan bank account once the account holder dies?

Have you ever thought how your family members will be able to access and claim the money in the bank if something happens to you? Today we will discuss this aspect and see what exactly happens once a bank account holder dies and what are the steps to be taken by the family members.

account holder death

Whenever there is a sudden demise in someone’s family, there is a panic attack. There is mourning of losing loved ones and chaos in the family for few weeks, but ultimately life comes back to normal later.

A few months later, family member start collecting all the financial data like life insurance policies, locker keys, investment details, loan details etc. etc. But the most important thing is the bank account. Bank account is the key to someone’s financial life and getting access to it is critical.

Here are the steps to claim the money in bank account.

Withdrawal from ATM Card

Before one moves to the actual process, we should first look at the obvious thing. Find out if you have the access to the ATM/Debit card and if you know the PIN. Just go and withdraw the money from the ATM if possible over next few days.

If for some reason you are not able to access the ATM/Card, then it’s time to follow the process.

Step#1 – Approach the bank & Meet the bank officials

You should approach the bank and meet the bank manager and share about the account holder death. Ask him/her the procedure to claim all the asset from the bank. If possible, show them the proof that the account holder has passed away (like death certificate)

Then the bank with immediate effect will make the deceased account in a dormant state (a state in which the there is no withdrawal possible). However, the deposits are still possible, because it may happen that few payments / dividends are going to be credited in coming days

Step #2 – Submit the documents

Case #1 – Single account holder

If the bank account was in single name, then the nominee approaches the bank with the death certificate of the account holder including his own authenticity proof. Then the procedure of transferring money to the nominee starts and the account remains in the dormant state for 6 months to 12 months (differs from bank to bank).

Here are the Required documents:

Application, stating that the account holder has passed away,
Notarized death certificate
FIR copy (if the deceased has passed in the accident and body is missing for some time )
Authentic photo id proof (such as adhaar card, pan card, driving license etc…)
Relationship with the deceased with proof,
Nominee KYC documents (photo, pan card, and adhaar card)

Some additional documents if there is no nominee in bank account

Incase nominee is not mentioned, then the bank needs clarity on who is the rightful owner of the money. For that, they might need a written WILL, which will mention clearly about the owner of the bank account money.

If WILL is missing, in that case, the bank can ask you to bring succession certificate from court, which will be the legal document certifying who is the actual owner of the money.

succession certificate for the legal heir from the court

Case #2 – Joint account holder – If the 1st account holder has passed away then the 2nd account holder can inform the bank with the application stating the 1st account holder has passed away and also to make the 2nd holder the 1st holder so that he/she can have access to the money

Required documents –

Application stating the death of the 1st holder
Notarized death certificate of the 1st holder
FIR copy (if the 1st holder has passed in the accident and body is missing for some time)
Authentic photo id proof of the 2nd holder (such as Adhaar card, pan card, driving license, etc…)

What if there is a dispute among family members?

It may happen that there are many people in family, who claim to be the legal heir of the deceased. Even if nominee is mentioned in the account, still the legal heirs may be different from nominee.

In this case, one has to move to court and apply for succession certificate which we talked about before. It’s a document which will certify the legal heirs.

Make sure your family does not face any issues

How do you make sure that your family members do not have to go through the problems while claiming back the bank account? Here are few things you can do

Make sure your family knows the ATM PIN and net banking details
Convert the bank account in joint name, so that anyone can access the account
Make sure you mention a nominee among one of the legal heirs
Write a WILL and mention about the beneficiaries very clearly

Let us know if you liked the article? Leave your questions if any, in the comment section and I will try to reply to all the comments and doubts.

A software guy left his job to be self employed – His complete story

Posted on November 20, 2018November 18, 2019 by Jagoinvestor

One of our readers, Anjan had shared his experience of leaving his salaried job last year to become self-employed. He wrote a detailed experience of his journey on one of the posts so I am reproducing his message in the form of the article here. (note that this was shared last year, but I am posting it now)

Over to Anjan experience sharing below…

I want to start off by saying that I was really inspired by that one article of yours (I am talking about Manish Article) where you wrote your experience about how you quit your job at Yahoo and finally decided to follow your dream against all odds and opposition.

Quit job in India - Real life experience

I left my software job at 27

Ever since the day I read that, I knew I had to get started on my dream and drew up an action plan to free myself from this IT job which I considered as nothing more than slavery from Day 1.

So last month, I successfully quit my job at the age of 27.

How my frugal nature helped me

I was always very frugal by nature even from back in my college days when I used to do odd online jobs that didn’t pay much but I ensured I saved every penny I possibly could. I built up sizeable savings which netted me a few thousands of rupees as interest every month.

I guess that habit carried over to my professional life when I got a job. I started saving almost 95-98% of my monthly income and managed my expenses as much as possible from the interest income.

My salary was a meager 35k, so it wasn’t easy but where there is a will, there is a way.

I was fed up of boring work and Politics

So after working 5 years during which I cursed my company and boss every single day, I finally had enough of the BS and dropped the resignation notice on them out of the blue. I got the topmost rating in 4 out of 5 years of my stay there.

So they were surprised by my decision especially at a time when media is reporting massive job cuts in IT due to US Visa issues and automation.

office politics

Having to do 12 hours of boring donkey work everyday, having to work on weekends/holidays thanks to impossibly tight deadlines without any extra pay, having to beg for 5 days leave to go on a vacation once a year, having to tolerate their politics and favoritism which denied me opportunities I deserved was killing my soul from within and I was dying a little with every passing day.

Even on holidays/vacations, there was an expectation to be available on phone for support.

I started acquiring new skills and planned my exit

I just knew life couldn’t go like this forever. So I made plans to become self-employed late last year. I started acquiring new skillsets through sleepless nights and sheer hard work to switch over to freelancing with the aim to open a small business a few years later.

Once I felt ready and confident, I quit.

After being self-employed for just over a month, it feels amazing. It’s hard work without a doubt and there have been many sleepless nights to deliver projects on time but the sense of freedom is just indescribable.

There is truly something to be said for working for yourself. The best thing is my salary is not fixed anymore. The harder I work, the more I earn, so there is an incentive to work hard and increase income.

Why I planned it NOW and not in the future?

Age is an important factor. I have reached an age where I knew my parents would start badgering me for marriage within the next couple of years. So I knew it’s now or never. I had to act and I knew I had to stick to my plan no matter what may come or else it will be too late.

The fact that I love to travel was perhaps my biggest motivation to become self-employed as employers would never give you more than 5 days’ leave even if you beg. I am the kind of guy who loves to go on month-long tours.

My next plan?

Thanks to my frugal nature, I saved up enough money during my employment to last many years even if I stop working today. I plan to increase my savings to an amount that would last a lifetime by the time I reach 30.

So a few years of sheer hard work is ahead of me but for now, I am enjoying my new found freedom even though I am working super hard.

Conclusion

Congratulations to Anjan for this new journey in life and best of luck to him. I hope reading his experience would be helpful for those who need some motivation to leave their jobs to break the monotony and explore their full potential.

Let us know if you have any more ideas or points to share?

How to File RTI Online in 4 simple steps (screenshots + process)

Posted on November 30, 2018November 16, 2019 by Anuradha Singh

Earlier RTI filing was too much pain, because it was very much time-consuming as it was an offline process.

A form was to be filled and then a Rs 10 stamp was to be attached and the entire form had to be sent by post to the required department of the government. The form took approximately 3 to 4 days to reach the concerned department.

So many people who wanted to file RTI refrained from doing it.

How to file RTI Online ? Steps and process explained

However now filling RTI is just a click away because we can file it online. I will tell you 4 SIMPLE and EASY steps to file RTI ONLINE without any hassle. But before that, let me explain to you in brief what is an RTI act.

What is the RTI?

The Right to Information Act 2005 commonly known as RTI is a law using which an Indian citizen can request for information from state or central government departments and offices. And such a request should be processed in a timely way as mandated by the RTI Act.

Let me now share what steps you should take to file RTI form online.

Step #1 – Create your free login or file RTI as a guest

To create a login, visit RTI website and click on sign up option.

If you do not want to create login then continue as a guest (by directly clicking to submit request button). To make it simpler I have attached the screenshot of the login page.

RTI login page where you can sign up and login to file your RTI request online

When we log in or even directly click on “submit request”, then the below image will appear and you just have to tick on “I have read and understood the guideline and click on submit button”. Below is a snapshot!

RTI guidelines

Step #2 – Fill the RTI form

The next step is to fill the main RTI form, you can access it directly by clicking here.

Filling an RTI form is a bit tricky. There are lots of things you should take care. There are dozens of govt departments and ministries which handle a different kind of work. So it’s important to know which department or ministry handles your RTI form.

Whatever is your complaint, it is important to write to the point and not hit around the bushes and also to write in bullet points because it will be very easy and eye-catching for the RTI OFFICER to understand your query and reply you even faster.

Let me make it easier for you by giving an example.

CASE STUDY – Mr. Shyam wants to file RTI for reasons for delay in roads repairs.

After the rainy season was over, Shyam noticed that the road was not at all in good shape. He also noticed that there were frequent accidents on that road and many people were losing their precious lives. He complained to the authorities, but no actions were taken and 3 months had already passed.

Shyam finally decided to file an RTI to know what is the reason behind so much delay.

How to fill online RTI form

If you are not sure which ministry you should choose while filing the RTI, then just Google search about it, and most probably you will find that information.

Step #3 – Make the fees payment

Once you click on submit, then the final step is to make the fees payment. The Fees for filing RTI is Rs 10 only. Two modes of payment are mentioned as

Internet Banking (only SBI bank option in there)
Credit or Debit Card / Rupay Card

how to make online payment for RTI application

Step #4 – Submit your application

The last and final step

Once you have made the payment click on to the submit your application. A unique registration number is generated. (please save it for future reference).
Now, wait and watch for a maximum of 30 days and you will mostly get a reply for your query.
If you have not received the reply or you are not satisfied with the answer from RTI department, then you can file the first appeal, which is free of cost for the first time. Learn more about first appeal here

You can’t File RTI to State Govt departments online

Note that the facility of filing online RTI is available only for central govt departments and ministries. You can’t file RTI for State govt departments through this online portal. For that, you should follow the offline process of RTI only.

I hope this article has taught you about filing RTI online and answered most of your basic queries. Please feel free to ask any questions in the comments section below.