If you are an NRI interested in buying a home in India, and are planning to avail a home loan for it, you should know certain pointers beforehand. RBI allows an NRI to apply for a home loan with the aid offered by Indian financial institutions. After you have already zeroed in on the property, these factors will come in handy for choosing an appropriate home loan:
1. Property Type
You can apply for the following types of homes:
Property under construction
Ready to move in properties
Upgrading a currently existing property
Property to be constructed on an already owned plot
2. Loan Amount
The loan amount of a home loan depends upon a couple of considerations:
Education qualifications: The loan seeker should at least be a graduate
Income: The factor that will be considered in terms of the income of the loan applicant is GMI i.e. Gross Monthly Income. However, sometimes, a comparison is conducted between Net Monthly Income (NMI) of the person and prospective Equated Monthly Instalment (EMI) to determine the loan amount.
Some banks also look into some other criteria such as the country of residence, job profile, etc. which may vary from person to person.
3. Interest Rates
There are three types of interest rates - mixed, fixed and floating types. The fixed rates remain the same and the floating rate keeps on changing during the course of tenure. On the other hand, the mixed-rate loans remain fixed for a pre-stated period after which they transform into floating rates. You can opt for floating rates as they do not penalise the pre-payments.
The following is the list of relevant documents that you must possess if you an NRI availing home loan in India:
Certificate of work experience
Permit and valid work visa
Bank statements of NRO or NRE accounts
Applicant from the Middle East will need to enclose employment card copies
For some banks, you would have to make a submission online. Plus, you can give a local resident the Power of Attorney if you want to further simplify the process.
If you are an NRI applying for a home loan in India, you can repay it from Non-Resident Ordinary (NRO) or Non-Resident External (NRE) accounts only. The repayments will have to be carried out in Indian currency. Furthermore, during the period of repayment, if your status changes to an Indian resident, the interest rate, tenure, and loan amount will be calculated and reworked on the basis of your newly attained status.
As an NRI applying for a home loan in India, you should know that the whole process is not as complicated as it is perceived to be. However, it is important to take into account that certain requirements of some banks may vary from the standard ones. Therefore, it is better to chalk out specific things in advance so that you can keep the necessary documents ready. In the end, make sure you approach the bank from which you want to avail the home loan, and clear your doubts regarding the whole process at the starting stage itself.