Regrob has been helping all the readers with their home loan questions and issues. But what about NRIs? Don’t worry, we are here to help them as well and tell them about the NRI home loan.
Actually, NRI is an Indian citizen, who holds a valid Indian passport and is staying abroad for employment, business or vocational purposes and has spent less than 182 days in a year in India.
NRIs are permitted by law to buy property in India and they can avail home loans for the same. Regrob has all the information they should get their hands on before taking the home and home l
Since, here we tell about NRI home loan and its procedure.
Which property qualifies for a loan?
In regard with NRIs, Home loans can be availed for any property ready for possession or under construction. It can also be taken for construction of property on an owned plot or for alterations to the existing property. Buying of a plot is also eligible for a home loan.
Conditions for NRI Home Loan
Income and educational qualifications play a significant role in determining the maximum amount of loan that an NRI can fetch. Banks permit an advance of 80-85% of the value of the property, subject to the Gross Monthly Income (GMI) of an individual. The maximum amount of loan to be given generally falls in the range of 36-40 times of GMI. Some banks may prefer the ratio of Equated Monthly Installment to Net Monthly Income (EMI/NMI).
Moreover, few other banks set different criteria depending on educational qualifications, place of residence etc. One vital piece of information is that home loans in India are only granted to those NRIs who are graduates.
The income which is taken into account for calculating the home loan eligibility of an NRI is the income remitted to India plus any income earned in India. For NRIs working in countries that restrict repatriation such as African countries, only the remittable portion of the income is considered for calculating loan eligibility.
Minimum age should be 18 years with regular sources of income. It also varies from bank to bank.
Employed abroad for at least 2 years or a valid job contract for a minimum period of 2 years abroad but has completed 6 months of employment or working abroad on assignments with foreign Governments / government agencies or International / Regional Agencies like the UNO, IMF, World Bank etc. or Central Government, State Government or Public Sector Undertakings, officials deputed abroad on temporary assignments or posted to their offices abroad.
A quick tip for the NRIs reading this is. Your loan eligibility can be boosted if you opt for a joint loan with relatives. It is to be kept in mind though, that for credit reasons, banks allow only a select list of relatives who can be joint owners of the property.
Tenure for NRI Home Loan
An Indian resident can avail home loans for a maximum time period of 25-30 years but an NRI can do so for a maximum of 15 years. The time period of home loans offered to NRIs is somewhere between 5-15 years. Extension can be given if seemed fit by a bank; however, it is extremely rare.
Rate of Interest charged on NRI Home Loan
The rate of interest charged to NRIs is 8.50% – 10.00%. The processing fee is generally charged on NRI home loans is 0.5% – 2.0%. Click here to read about Home loan at 0% interest rate.
List of Documents required by NRIs when applying for a Home Loan
An additional list of documents required by you when applying for a NRI home loan in India is as follows-
2 passport size latest photograph with signature across
Valid passport copies
Valid visa copies
Cheque / Draft in INR for fees
Power of Attorney document
Copy of PAN Card
Self-attested address proof
For salaried individuals
Copy of current appointment letter OR Copy of salary certificate clearly mentioning the date of joining, current salary earned and designation held in the company
Copy of previous appointment letters
Last 3 months salary slip for fixed salary and last 4 months for variable salary
Last 6 months bank statements clearly mentioning salary credits in the account
For self-employed individuals
Copy of Incorporation of business.
Income Proof –
Middle East: Last 2 years audited/C.A certified P&L accounts.
US & Canada: Last 2 years CPA compiled/reviewed/audited P&L accounts.
Others: Last 2 years C.A or equivalent certified/audited P&L accounts.
Partnership deed (in case of a partnership firm)
MOA & AOA of the company (in case of a private ltd. company)
Last 6 months bank statements in the company’s name
Last 6 months bank statements in individual’s name
Business profile and office address proof
Medium for submission of Documents
So are you wondering whether you have to fly down to India and then dream of a home loan? You don’t. Yes, that’s right. You don’t have to wait for your next trip to India to apply for a home loan. A number of banks have branches in countries like Dubai, Singapore, London etc. where you can apply for home loans. Few banks like ICICI, HDFC and Axis also do so much as offer the facility of online submission and status updating. Isn’t that super convenient!
However, you would need to execute a General Power of Attorney in favor of a resident Indian who would act on your behalf with the bank. If the POA is being issued while you are abroad, it needs to be signed in front of the embassy official.
How to repay your home loan?
The repayment of these loans can only be through Non-resident External (NRE) or Non-resident Ordinary (NRO) accounts with remittance from abroad through recognized banking channels. The repayment can also be made from any deposit accounts maintained validly in India including Non-resident (Ordinary accounts). Or it can also be from rental income derived from the said property by specified close relatives. Apart from these, No other funds can be used for repayment of such loans. The repayment has to be made in Indian Rupees only.
What if your status changes from NRI to Resident during course of loan?
If during the course of the loan your status changes from NRI to resident Indian, the loan is amended as per the revised income. The interest applicable is charged accordingly, and the tenure may also change.
So, here we told you all about NRI home loan.
And we hope that you can find their dream home and the home loan with our help, all the luck to them. Rest, you always have us.
Kindly give your feedback in comment box
For more information call: – 9529331331