NRI’s Home Loans Easily Available In India

Published on: Jun 14, 2015 @ 20:26

Many  NRIs  like  to  have  a  home  back  here  in  India  and  a  home  in  their  native  country is simply  a  must. Buying  a  property  is  one  of  the  greatest  dreams  for  most  of  the  NRIs, no matter  which  part  of  the  world they  live  in.NRI’s home loans  schemes  of  many financial institutions  are  available  to  make  that  dream  a reality.

NRI’s home loans  are  now  easily  available  in  India,  subject  to  fulfillment  of  certain conditions.  Home  loans can  be  availed  for  any  property  ready  for  possession  or  under construction, construction  of  house  on  an owned  plot  or  for  alterations  to  the  existing housing property. Buying  of  a  plot  also  qualifies  for  a  home loan.  Make  sure  to  check  the  title papers  of  the property,  especially  if  it  is  inherited  or  jointly  held.

As  per  the  definition  specified  by  the  Reserve  Bank  of  India  (RBI)  i.e.,  “An  Indian  citizen who  holds  a  valid Indian  passport  and  stays  abroad  for  employment  or  carrying  out  business or  vocation  under  circumstances indicating  an  intention  for  an  uncertain  duration  of  stay abroad  is  an  NRI”. So  those  eligible  for  home  loans under  this  category  would  be  those employed  or  carrying  out  business  outside  India.

Education  qualification  and  income  play an  important  role  in deciding  your  loan  eligibility. Like, only  graduate NRIs  can  avail  home  loans  in  India.

An  NRI  loan  applicant  must  be  21  years  old  and  maximum  age  limit  is  60  years  or retirement  age, whichever  is  earlier  at  the  time  of  loan  maturity.

On  the  basis  of  the  repayment  capacity  of  the  NRI,  financial  institutions  fund  80  per  cent of  the  value  of the  property  or the  cost of  construction  as applicable  and  75  per  cent  of  the cost  of  land  in  case  of  purchase of  land,  subject  to  the  Gross  Monthly  Income  (GMI)  of  an individual.

Generally, an  NRI  is  eligible to  get  a  home  loan  in  the  range  from a minimum  of  Rs 3-5 lakhs  to  a  maximum of  Rs 1  crore,  this  again  is subject to  variable  depending  on  the priorities  of  the  home  loan. If  your spouse  is working  both  of  you  can opt  for a joint  home loan  to  enhance  your  loan  eligibility.

Besides, the  home  loan  tenure  for  NRIs  is  available  within  the  range  of  5 – 15  years. Also, the  rates  of  interest charged  for  home  loans  to  NRIs  generally  remain  at  par  with  those offered  to Resident  Indians.

The  documents  normally  required  to  be  submitted  by  the  NRIs  are  copies  of  the  passport, valid  visa,  work permit,  contract  of employment,  work  experience  certificate,  salary  certificate and  bank  statement  of  NRE / NRO  accounts,  overseas  bank  account  for  the  last  three months showing  salary  credits, the  labor  card / identity  card.  For  those  residing  and  employed  in  the middle  east, copy  of  employment  card  is  also  required. Salary  certificate  should  be  attested from  the  embassy  if  the  salary  is  not  getting  credited  to  a bank.

Self  employed  applicants  need  to provide  copies  of  six  months  overseas  bank  account statement  and  NRE / NRO  account,  brief  profile  of  the  applicant  and  business  or  trade license  or  equivalent  document, passport with  valid  visa  stamp,  computation  of  income,  P & L account  and  Balance  Sheet  for  the  last  three years certified  by  the  CA / CPA  or  any equivalent  authority  as  the  case  may  be.

Another  document  required  is  the  power  of  attorney.  The  POA  is  important  because,  since the  borrower  is not  based  in  India;  the  HFC  would  need  a  ‘reprentative’  in  lieu  of  the  NRI to  deal  with  and  if  needed. Although,  not  obligatory,  the  POA  is  usually  drawn  on  the  NRIs parents / wife/ children.

Payment  for  the  purchase  of  property  should  be  made  from  either  funds  received  in  India through  normal banking  channels  or  funds  held  in  a  non-resident  bank  account.  The repayment  of  the  loan,  comprising  of the  principal  and  interest  including  all  the  charges  are to  be  remitted  to  the  HFC  from  abroad  through normal  banking  channels  through  Non-Resident  External  ( NRE)  or  Non-Resident  Ordinary  (NRO)  or Foreign Currency  Non-Resident  (FCNR)  accounts  in  India. In  case  you  let  out  the  property  you  can  use  the  rent to repay  the  loan  as  well. Cheques  issued  from  a  relative’s  local  account  can  also  be  used  to make  the  loan payment.

 

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