Can one owner make down payment and other avail loan

952 votes

Yes two people can purchase a property jointly and be the co-owners, these two persons may be total strangers therefore it is not necessary to be related to each other.
Practice is either of the two have to contribute some money towards the purchase, one may give the down payment, the other may avail a housing loan, in any case what will determine their share or contribution at the end of the loan tenure would be how much each person has contributed towards the total sale consideration of the said property, and who has been repaying the loan.

Advocate Kiran N Murthy LawRato

919 votes

We all aspire to buy a house of our own at some point in life. But what if your dream home is of a greater value than you can afford? This is where you may want to consider taking a joint home loan. A joint home loan is taken by 2 or more people by clubbing their incomes to raise a loan of higher value. It will not only help you take a loan of a higher value, but will also give you tax benefits too. Let’s look at each aspect of joint home loans in detail:
1. If a single income is not sufficient to cover the loan amount, then you can bring in a co-applicant to get a higher loan amount. Many couples opt for joint home loans to raise a loan of higher value.
2. oint home loans are beneficial from a tax point of view too. Co-owners of property, who apply as co-borrowers can avail tax benefits under Section 24 and Section 80 of the Income Tax Act.
3. A co-borrower is a person with whom you take the home loan. Each co-borrower is equally responsible to repay the loan amount. Joint home loans can be taken by as many as 6 co-borrowers.
How to repay a joint home loan?

A joint home loan can be repaid like a regular home loan. EMI payments can be made through a single/ joint account. A few consider giving proportionate cheques for each EMI, but this can’t be done as banks’ internal systems don’t accept 2 cheques for same EMI. You can divide the repayments with the help of postdated cheques.

As far as the bank is concerned, it doesn’t matter who contributes how much in repayment, as long as EMIs are paid timely. If there is a default in payment, it will proceed with the standard loan recovery process against all co-borrowers. Thus, before taking a joint loan, it is very important to understand what your rights and responsibilities are.
Here are a few points you must consider before taking a joint home loan :

Before you sign as a co-applicant, make sure you get a right to the property. If you are going to repay the loan, you might as well benefit from the property.
A couple taking joint loan should ideally take separate term life covers to reduce financial burden on the other in case of one’s demise.
The repayment record of a joint home loan reflects in the credit score of all co-borrowers. Default in payment by any partner can impact your eligibility for a loan in the future.

Get answers to the following questions before taking a joint home loan;

Who is responsible for making payments?
Who owns the property?
How can I get out of the loan?
What if I want to sell my share?
What happens to the property if one of us dies?

Since the lender gave loan based on a joint application, if the primary borrower defaults, files for insolvency or passes away, it becomes the co-applicant’s responsibility to repay the loan. So, you must make sure that your co-borrower is trustworthy and has the financial ability to pay off his share.


Married couples: One can be a co-borrower with their spouse. For the lender, this is an ideal situation. In this case, both need not be co-owners of the property. However, co-ownership is always advised.
Father and son: When the father has only one heir, either of them can be the main owner of property. But if the father has more than one heir, then the lending institution would ensure that the son is the primary owner, to avoid any disputes after the demise of the father.
Father and unmarried daughter: In this case, lending institutions would ensure that the daughter is the primary owner of property before granting loan. This is done to avoid any disputes after her marriage.
Mother and unmarried daughter: This case is similar to that of father and unmarried daughter.
Brothers: They can be co-applicants in a loan provided the property is co-owned by them, they are currently living together, or are expected to live together in the new property.

Friends, sisters, cousins, brother – sister and unmarried partners are generally not given joint home loans.

When the spouses apply as joint applicants, the maximum term of home loan can be 20 years, depending on the retirement age of the older applicant. When co-applicants are parents or brothers, the maximum tenure is restricted to 10 years. Also, if parents’ income is considered for repayment, loan tenure is restricted by their retirement age.
What if there is a dispute between co-borrowers?
To avoid any disputes in future, ask the lender to state in the loan itself that each co-borrowers’ liability shall not exceed a given per cent of the principal amount. If the lender disagrees to such a clause, then you can draw up an agreement with all your co-borrowers on splitting the liability. Put down all the terms on a stamp paper and sign it.

Advocate Srinivasa Kudva LawRato

962 votes

The two people can purchase the property (Apartment). even though they are not being blood relatives they can jointly purchase the property but the bankers will not fund if one person makes down payment and other person cannot avail housing loan

Advocate Devaiah I M LawRato