14 August 2011
The Best way to Repay your Joint Home Loan
Purchasing a flat is going out of reach for many newly wedded couples and many are going in for joint home loans. They get tax benefits and they can also use both their salaries to purchase a bigger home.
All documents must be carefully perused by both in front of the bank manager as there must not be any doubts regarding repayment and title issues. With the help of a lawyer they can make the title document in the name of both members who have applied for joint home loan. It is best for all couples going in for joint home loans to make an understanding and plan the repayment strategy. One spouse’s income can go for monthly expenses and the other can repay the loan or alternately they can repay every second or third month. This will allow both spouses to shoulder the responsibility of repayment and also keep the figures alert about the repayment schedule and tenure of the home loan.
The best arrangement would be to keep aside one income for monthly household expenses and other miscellaneous expenses. This way they get a clear cut amount every month for the repayment of their home loan. In many case saving for the repayment does not work as it is but natural that they will go over board in spending. Calculate their monthly household expenses; keep some for entertainment and outings, family of either spouse long stay guests, travel and of course the rainy day! for any unexpected illnesses or problems coming up with both or with either of the spouses. Then they will get the right amount they can repay every month and according to this they can apply for loan amount. If they have gone through this before they will not have many problems with the repayment schedule of their joint home loan.
Some people also split all the outgoing bills and expenses to make a detailed expenses plan. This is again better to avoid any misunderstandings later on between the couple. There may not be a fixed rule for this. they both can adjust and readjust to make a comfortable repayment schedule together according to their total finances.
Never try to miss out an EMI or saving for EMI as this very soon becomes a habit. Plan your other expenses carefully and since this loan is going to be of a larger amount, you have gone in for a joint home loan, then both have to keep working towards the repayment of the same. In case of either spouse quitting the job will create a financial crunch to your household expenses, so I would advise to go in for a more practical amount as loan. If you are saving much more than expected or getting good increments and rises then you can always upgrade your loan and pay by clubbing some EMIs. This would again save your money paid as interest if you opt for prepayment of your loan.
Strictly follow the schedule and make it a habit for saving from the beginning as this habit goes a loan way to achieve not only your dream home but many other dreams in your whole life!