NRI home loan is a dedicated home loan option developed exclusively to help non-residents Indians to acquire finance to purchase residential property in the country. The formalities of availing this type of loan are same as the regular home loans, only the paperwork is a tad complicated.
What is your eligibility?
As an NRI, your income and educational qualifications will be considered. They will decide how much amount you will be entitled to get. A graduate degree is a must to avail a home loan. Most banks also confirm the number of years you have been working and your salary details, current and past records. They have firm limits beyond which they cannot authorise the loan. The income taken into account is what you earn outside the country plus any other income in India (rent from property, shops etc).
List of requisite documents
- Valid visa & work permit.
- Copies of passport.
- Local address proof
- permanent address in India
- Contract of employment.
- Work experience certificate.
- Bank statements
- Salary certificate (attested by the embassy if not credited to a bank)
- Power of attorney to someone in India – CA or relative.
Submission of documents, amount eligibility:
You have to come to India to start the home loan process although most banks have branches across the world, you can even start applying online. At first you are required to hand over the Power of Attorney to someone (CA or your relative). There isn’t any fixed amount eligibility when it comes to granting home loans. It depends on the bank’s preconditions and your eligibility.
Know your loan to value (LTV)
This is crucial to be familiar with when applying for a home loan. LTV is the ratio of the amount which you want to borrow to the real cost of the property. Banks normally offer a loan of 80 to 85% on the property value, then again it depends on the fore-mentioned aspects.
For instance, if the price of the home is Rs 1 crore, the bank will offer you loan for Rs 80 to 85 lakh. The remaining 15-20% you will have to bear.
Home loan term
While an Indian resident can get a home loan for almost 25 to 30 years, the term for NRIs is limited. It may be 10 to 15 years. It is so as the NRIs repayment capability is better than resident Indians.
Loan interest rate & loan repayment
This again differs with each bank. Whilst in some the interest for NRIs (both floating and fixed) is the same as resident Indians, in some it may differ, but the difference is not huge. When it comes to EMI or repayment, NRIs can do payments through either the NRO or NRE accounts with funds transfer from abroad. Repayments are accepted only in Indian Rupees. While doing the down payment, the transfer can be done via standard banking channels or NRO/NRE account in India.
If you are an NRI seeking home loan in Delhi NCR then I hope this post was helpful.