Does co-owner needs to be the co-borrower also?

POSTED BY Anshul Gupta ON June 3, 2013 4:10 pm COMMENTS (5)

Hi All,

My wife and I plan to buy a property jointly where 50% of the cost will be funded by my own contribution and 50% by loan taken in my wife’s name. 

Will bank have any issue in funding such propery where secondary co-owner i.e. I will not be a borrower of the loan ?

Regards,

5 replies on this article “Does co-owner needs to be the co-borrower also?”

  1. Dear Anshul, in case of home loan, as the property is to be mortgaged & against the loan given, bank or financial institution do has it’s rights on the property, it’s asked by bank to make the co-owner, co-borrower as well.

    In case your CIBIl score is poor, still as the over all loan amount is very less, Bank may consider your combined loan application.

    thanks

    Ashal

  2. Anshul Gupta says:

    Poor CIBIL rating !

  3. Ashish Garg says:

    Dear Anshul,

    This is pure foolishness on part of LIC / SBI.

    But, I was wondering why you wouldn’t want to be the co-borrower?

    If you really wish to take loan from SBI / LIC, then become co-borrower and let your wife pay the EMIs. Internally you may sign a loan sharing agreement with 95% to 5% in your wife’s favour.

    Ashish

  4. Anshul Gupta says:

    OK, Thanks. Sadly both LIC & SBI saying that I can’t be the owner as I am not borrowing from them

  5. Ashish Garg says:

    Dear Anshul,

    No, this is not required. Co-owner need not be the co-borrower. Consider a simple example, a couple purchases a property, wherein wife is a homemaker, so even if she applies for a loan, she will not get cos there is no earning but the loan can be given to the earning husband as per the income. So Co-owner need not be the co-boroower.

    Co-borrowing only increases the loan capability thus increases the chance of loan sanction apart from offering tax benefits to both/all borrowers.

    Whereas in reverse scenario for a joint loan, both/all the borrowers must jointly own the property.

    Ashish

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