How to remove a Home Loan co-applicant?
How to remove a Home Loan co-applicant?
Renting offers the flexibility of the location and monthly rent. On the other hand, buying a house ensures financial security and wealth creation over time.

We all need a house to live in. You can have one by renting or buying. If you are finding it difficult to choose between renting and buying, let us break it down for you. Renting offers the flexibility of the location and monthly rent. On the other hand, buying a house ensures financial security and wealth creation over time. In the longer run, security and gains is what you should prefer. Hence, you should consider buying a house.

Buying a home requires a significant amount of money. Given this, you may wonder how you would arrange the necessary financing. Don’t worry. You can apply for a Home Loan to finance your home purchase systematically. High-value Loan amounts, competitive interest rates, reasonable tenure, and flexible repayment terms are the benefits of applying for a Home Loan.

Who is a co-applicant?

A co-applicant is an individual who applies for a Home Loan with you. Your parent, spouse, or earning adult child can be a Home Loan co-applicant. Typically, applying for a Home Loan with a co-applicant is beneficial as the bank also considers their eligibility to determine your overall Loan eligibility. This means having a co-applicant boosts your Home Loan eligibility, improving your chances of getting approved for the Loan and getting a better offer.

The co-applicant also shares the Loan repayment load with you, which may make the loan repayment affordable. Hence, you could consider applying for a Home Loan with a co-applicant. The application procedure remains the same. You need to fill out the Loan application and submit documents required for Home Loan at the bank’s branch or upload them online.

How to remove the co-applicant?

Suppose your spouse is your Home Loan co-applicant. Your spouse’s financial standing has taken a hit, and they can no longer afford to pay the Loan with you. Or you and your spouses are heading for a divorce. In that case, the co-applicant will not want to repay the Loan with you. Here, you need to remove the Home Loan co-applicant. Doing so is possible. You need to follow these steps to remove the co-applicant:

  • Request a novation

Novation is a legal process wherein one party is replaced by another in a contract. To remove your Home Loan co-applicant, you need to request a novation from the bank. Visit the bank’s branch to request this. Note that before requesting a novation from your bank, check if your Loan agreement permits you to do so.

  • Provide reason for removal

The bank allows the removal of the Home Loan co-applicant only if there is a viable reason for it. Contact the bank’s customer representative and provide your reason for co-applicant removal.

  • Establish your sole eligibility

 

You need to establish your sole eligibility before the bank to continue with your Home Loan. Hence, keep up with a good financial profile and excellent credit score.

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