Non-Resident Indians can avail financing assistance in the form of housing loans, for purchasing residential properties in India.
Banks and housing finance companies follow the guidelines of Reserve Bank of India to define NRI – “An Indian citizen who holds a valid document like Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI.”
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Here are the salient points and useful information for NRIs regarding the process of receiving a home loan.
- The applicant must be an Indian passport holder.
- Loan can be availed for up to Rs 1 crore or 85% of the cost of the property, whichever is lesser.
- Loan eligibility is decided based on the repayment capacity of the individual. Repayment capacity takes into consideration income, age, qualification, number of dependents, other income, amounts and a few other items.
- For loans between 5 and 10 years, rates of interest vary from 7.75% to 9%.
- Repayment period ranges from 5 to 20 years or on superannuation or on completing 60 years of age.
- The loan is repaid in the form of equated monthly installments (EMIs).
- The security for the loan would be the equitable mortgage of the property financed. This is created by the deposit of the original title deeds of the property with the HFI.
- Local guarantors are also required in case of some institutions.
- Copies of the following documents have to be submitted along with the application for the loan to the institution:
- Employment contract
- Latest salary slip
- Latest work permit
- Visa stamped on the passport
- Power of Attorney to a local individual
- Receipt of payments made for purchase of the property
- Agreement of Sale
- A salaried applicant should be abroad for at least a year, and a self-employed applicant for 3 years.
