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An NRI Home Loan is one of the best ways to actualize your dream of owning a home back in India. It provides you a substantial chunk of the funds you need to finance your purchase plans; but more than that it comes with attractive interest rates and lengthy tenures that make repaying the loan a smooth experience. So, if you’ve been thinking of taking the leap into debt and buying that home you’ve always wanted, you sure are thinking along the right lines. However, there are a few things you’d want to watch out for before singing along that dotted line. This article will highlight 7 of these factors to ensure you aren’t blind-sided by any unexpected hiccups or hassles. 1. NRI Home Loan Eligibility. The first thing you want to keep in mind is your home loan eligibility. Similar to resident Indians, your eligibility would depend on your credit rating, existing debt obligations and disposable remuneration. However, some lenders will also take into consideration your education qualification and the number of years you’ve been working or operating a business abroad.

If you want a clearer picture, there are a number of lenders and aggregator sites that have a home loan eligibility calculator for NRIs that you can use to get an approximate loan amount. 2. NRI Home Loan Tenures & affordability. This is the next thing you want to look out for is the tenure and affordability of the loan offer. Some banks offer tenures as long as 20 years, which would translate into relatively smaller EMIs. However, if you are one who wants to get out of debt quickly, you can opt for a shorter tenure but keep in mind that this would result in much higher EMI amounts. So before you commit to tenures, it’s advisable to check the affordability of the loan by using an EMI Calculator. 3. Legal, technical & property search advisory solutions. Since opting for an NRI Home Loan is in many ways a once in a lifetime decision, you want to make sure you get everything right, cross all your t’s and dot all your I’s. This is where a lender that offers home loan advisory solutions and property and property search advisory services that will give you access to- expert legal and technical counseling to help you make the right home buying decision.

 4. Interest rate type & loan reset frequency:

Just like a home loan for resident Indians, you can choose from fixed, floating and semi-fixed interest rates on an NRI Home Loan. Many NRIs go for the floating rate as it is normally lower than fixed rates and generally allows borrowers to pre-pay their home loan without penalizing them.

As far as loan reset frequency is concerned, any new bank home loans taken after April 2016 will follow MCLR-based interest rate regime, under which, it is compulsory for banks to reset the lending rates of every borrower once in a year on pre-specified dates. The interest rate on the reset date remains applicable till your next reset date. Thus, if you expect interest rates to come down in the future, then you should opt for a loan with the higher reset frequency as it will lead to quicker cuts in your interest rate. Or on the other hand, opt for a loan with an annual reset date if you expecting the rates to rise in future.

Keep these 4 things in mind when in the market for an NRI Home loan, and also speak to a financial expert before taking the plunge; it will help you gain a better understanding of the financial circumstances you are choosing to bring upon yourself.

There is a misconception that it is difficult for NRIs to buy property in India with a home loan. Some NRIs feel that the properties eligible are very restricted, some feel that the interest rates applicable are much higher and that the tenures are very short. However, all this isn’t entirely true and this article will highlight the similarities between normal home loans & home loans for NRI in a bid to prove just how easy it is to own a home in India, regardless if you are an Indian resident or NRI. Firstly, properties eligible under an NRI home loan are almost the same. Some people feel that there are major restrictions on what kinds of property an NRI can buy with a home loan. This is not true and in fact, the properties eligible are almost the same, it’s just that NRIs cannot purchase agricultural land, plantation land or a farm house in India.

Besides this, an NRI can use a home loan for self-construction of a property on a plot of land, purchase of a plot of land allotted by a society/development authority, renovation of an existing property in India, purchase of a house either under construction or on a resale. An NRI can also use a home loan to buy a second home.

Next, the interest rates are also the same. Most lenders will provide you an NRI home loan with interest rates that are just the same as a normal home loan. The interest rate may range from 8.35 to 9.05 percent, which is just the same as a normal home loan for Indian residents. The tenures are also similar. Some people think that a home loan for NRIs offers very short repayment tenures. This is again not true, with most leading financers providing home loans for NRIs with tenures as long as 15 years. Some lenders provide long tenures too, but this is purely at their discretion. An NRI Home Loan is one of the easiest ways to purchase a home in India. It offers potential customers the perfect way to finance their homeownership plans. In some cases, you don’t even need to leave your country to avail one. If the lender you opt for has a branch in your country, you can carry out the entire process from that branch itself, without the need of ever coming to India. Indian property is always a good investment. If you ever think of going in for such an investment, don’t hesitate to go in for an NRI home loan. These loans can help you buy the property you have your eye on without stressing your financial capabilities. There also a plethora of options to choose from and you can refer to the many aggregator websites to make a better informed decision. What’s more is that most leading lenders have also introduced advisory solutions & expert consulting that will give you legal & technical advice for all your purchase related queries.

We hope this article has been helpful, if you still need further guidance, you can consult a financial expert. He or she will give you valuable insights to the NRI home loan domain.

Buying a home in India is always a good idea for an NRI. Either you have a place to stay every time you visit or you have a good investment bringing you a steady flow of rent money that you can move into when you retire and come back to India to settle.

However, most NRIs give property a pass due to complex procedures and the frequent through and froes required to procure property. If you’ve got Indian property on your mind but are worried about the tiresome process than we have good news!

You can find, get finance and buy a property without stepping foot in India at all. Wondering how? Well, this article will detail just how you can use the internet to become a homeowner with complete ease.

Firstly look for an online home loan for NRI:

Yes, buying a home in India with your own money is a difficult proposition. However, with the help of a home loan for NRI you can secure a home by paying as little as 10% of the property’s value. If you’re thinking a home loan will require you to visit India then think again because most leading lenders will allow you to carry out the entire process of applying, submitting documents and paying to processing fees completely online. Then you can have the money transferred to your NRO account and continue with the purchase of the property.

But how can you buy find a property without visiting India?

Well, leading lenders will provide you Property Search Advisory Services in addition to your home loan for NRI. You can avail these services to have end-to-end advice on elements such as developer projects, location, documentation and offerings. This allows you to compare properties and find a home that you find suitable without flying back and forth.

You can even get home loan advisory & legal counseling online.

Yes, you can have all your NRI home loan related queries answered online or over the phone with Home Loan Advisory Services. If the lender you choose has a branch in the country you presently reside in you can even visit their office to in depth details, counseling and advice.

The internet can also help you plan your home loan for NRI

Yes that’s right, you can plan and budget your repayment process with complete ease with just a few clicks of your mouse and a few taps on your keyboard by using an online EMI Calculator. This tool provides you with a detailed break-up of your repayment process by providing you a near-exact EMI amount for every month of your repayment schedule.

This allows you to budget your income and expenses to accommodate the repayment amount. To use this tool all you have to do is visit the website of the lender or go to a home loan aggregator site, find the calculator, input details of your loan such the amount, the tenure, the interest rate and hit enter! The calculator will provide you with the complete amortization table for the entire loan tenure.

So this is how the internet is making it possible for NRIs to buy their dream home without the up and down normally associated with buying a home in India. We hope it has been helpful and do consult a financial expert before you proceed further.

After staying abroad for a long time because of your work, you want to spend your rest of the life post retirement in the lap of your motherland, but buying a property in the days of inflation is a task work both physically and financially. Since it is a lifetime investment so you need to choose a proper location where your house would be situated considering the security feature of the area. The NRIs enjoy the currency advantage owing to depreciating cost of INR, beefing up their purchasing power.But buying a home nowadays is not so easy; it can be made easy with a housing loan for NRI. With the emergence of various financers a wide choice of home loans are available for the Indian and NRI borrowers.

Irrespective of your being a salaried or self-employed NRI you can take the housing loan for NRI. If you are planning to buy a new home or resale home or planning to construct a home on the plot bought or planning to extend and renovate your existing property then you can take the loan for it. Along with generic documents, you need to submit passport and visa copy. In case you want to submit the documents through & take decisions on your behalf then entitle any of your relative with the power of attorney. In your absence your relative with power of attorney can be present to avail disbursement of the loan amount.

As an NRI you can get a maximum of 20years to repay your debt at a competitive rate of interest. The rate of interest depends on the loan slab, type of interest and loan eligibility of the borrower. As a borrower you can make a choice between fixed and adjustable rate of interest, the dilemma between the two rates can be sorted with a combination of two, popularly known as truly fixed interest in which the borrower has to pay fixed rate of interest for a stipulated time then the interest rate switches to adjustable rate of interest.

If you invested in under construction property, then you have to pay the interest till the completion of the construction after which the EMI starts. If the investment is done in already constructed property then the EMI commences immediately. You can get maximum of 70-90% of the property value depending on the loan amount. You can enjoy income tax deduction on the paid interest.To repay the loan amount the NRI borrower has to possess a Non-resident external or a Non-resident ordinary account, and he can do the payments only in Indian rupees with post dated cheques and other available options.

You can have a co-borrower while applying for a housing loan for NRI. It’s not necessary that co-borrower needs to be a co-owner; for your benefit you can add an earning member from your family. Once you approach the financers, they can even guide you for selecting your property based on your loan eligibility.

Staying away from the motherland can’t stop you from building a house of your dream. The home loan for NRI from the banks and other financial organizations can help people working abroad to invest money in buying properties in India. There are many public and private sector banks that have come up with the financial aid for the borrowers. The amount of money an NRI can avail as the loan amount depends on three main factors; the educational qualification, place or country of residence and gross monthly and net monthly income. The financial institute’s haveset a minimum criterion for earning based loan application.

The properties that are covered by the home loan for NRI scheme are of four types;the properties that are already constructed, under-construction property, properties that are to be constructed over pre-owned plots and existing properties, which requires change.

The NRI home loan tenure and the rate of interest differ from that of a residential home loan. Indians can get tenure up to 30years for repayment, but, an NRI’s tenure is restricted to five to twenty years. The tenure is based on the financial institution granting the loan and the loan amount. Some organization charges 0.25-.50% more on the base rate of interest as compared to a residential home loan. But, some banks punches the same rate of interest as the residential home loan of 8.7-9.2% in general and 8.65-9.15% for women borrowers. The borrower can select between adjustable/floating rate of interest and fixed rate of interest. The floating rate fluctuates depending on the market situation, but, the fixed rate doesn’t change. The borrower should ensure that no hidden charges are there.

Copies of passport, valid visa and permit for work, employment contract, work experience certificate, salary circulars and employment card are some of the required documents required for the application of home loan for NRI. If the NRI borrower wants a resident back home to do the document submission on his behalf, then the NRI has to grant that person a Power of Attorney, so that the resident can complete the process for him. The NRI borrower has to make the down-payment of 10-30% of the loan amount as margin money, rest is disbursed by the lending organization. The amount may change with different organizations. As a security the bank keeps the allotment letter of the lending property with itself, and returns it to the borrower, once, the loan amount is paid.NRI borrowers can also avail tax benefits under section 80C, Income Tax 1961.

For repaying the loan amount one has to possess a Non-resident external (NRE) or a Non-resident ordinary (NRO) account, and the payments can be done only in Indian rupees. During the repayment procedure, if the NRI borrower decides to become a resident of India, the various aspects of the loan; such as loan amount, tenure and rate of interest, all will change to residential home loan borrower. Some banks offer the borrowers the option to reduce the applicable rate through Conversion Facility. The NRI borrower can take the advantage of this facility by paying a nominal charge.

Like the residential home loan, the home loan for NRI also includes 1.25% of the loan amount plus the taxes as processing charges.

Many Indians do reside abroad, earning a good income. Some of the non-resident-Indians (NRIs) may want to invest in Indian real estate property or simply wish to purchase a second home for themselves for future use. One reason to buy a house in India than the abroad is the cost difference. The property in India may cost lower than one in NRI’s current place of residence.

Even then, the non-resident-Indian may find it difficult to pay off the complete cost of the house he/she wants to purchase in India. In such a circumstance, the person can apply for NRI home loans to make up for the lack of finances. Some people think that NRIs cannot purchase a house in India, but that is not true. A lot many banks and financial institutes are willing to lend to NRIs.

However, the regulations and criteria for NRI Home Loans could differ from resident home loans in some ways:

Documents Needed: Documentation involved are a copy of visa, passport, address proof, and employment related details- appointment letter, salary slips, contract of employment. Except visa and passport, most of these documents also have to be produced by an Indian resident for a home loan.

Eligibility Criteria: The eligibility criteria for minimum years of work experience in abroad and minimum age can vary from a lender to another. Few banks allow lending for NRI home loans only if the person has at least 2 years of work experience abroad, while in few cases even a year’s employment is accepted. Some lenders can have a requirement for a minimum monthly salary drawn as well.

EMI & Interest Rate: The EMI and interest rate or other charges for NRI home loans maybe same as that for resident Indians seeking a housing loan. The loan tenure could extend till 20 to 30 years, but in some circumstances, lenders may restrict it to just 10 to 15 years.

Loan Repayment: For NRI loan, repayment amount is accepted only in Indian rupees and not in the currency of the country where the NRI is living at. Repayments has to be made by remittances from abroad via non-resident rupee (NRE), normal banking channels, or a non-resident ordinary rupee account (NRO).

The above-mentioned factors are some of the important ones for NRI Home Loans. However, before your NRI friend or you as a non-resident -Indian approach a bank or lender for a housing loan, you must research about possible charges included as per NRI lending rules based on regulatory or political charges.

A lot of non-resident Indians who go abroad for business often plan to comeback someday. For these NRIs, an NRI home loan provides an ideal opportunity to buy their dream home back in India and gives them the ability to settle when they come back to the country. These home loans are given out by all major banks and can be requested by anyone who fits the description of an NRI, which is in general; a person who is an Indian citizen, holding an Indian passport, who stays out of the country for the purposes of business or work for an uncertain period of time.

This includes those who work as government officials in international organizations such as the UN, individuals who work for private companies with postings abroad or anyone else who conducts or facilitates business outside the country. For these people, buying a house back in India makes sense as they are most likely planning to come back to India upon completion of their work. But it wouldn’t be practical if they had to come to India and then start searching for a home as we all know that the process of buying a home in our country is complicated and often long drawn out. It is for this reason that many banks have provided the facility of availing an NRI home loan, which allows the individual to find and set up their house in India while they’re still abroad making the process of settling convenient, quicker and easier. For those considering an NRI home loan, it is important to bear these five crucial points in mind.

What does an NRI home loan avail you?

Just like a normal home loan, an NRI home loan entails you with the ability to purchase or develop certain properties in India. In fact, an NRI home loan entails you the same properties that a resident Indian can purchase through their home loan. The properties that are covered by this scheme are of four types; properties that are already constructed, properties that are under construction, properties that are to be constructed on an owned area and existing properties to which changes are to be made. In each of these cases a home loan can be requested from a bank to purchase or develop the property except in the case of creating alterations to a pre-existing property; in which case there will be a variation in the type of loan that is provided. This is besides the fact that every bank will have different terms and conditions for the loan they provide.

How much can I request for as my loan amount?

There is no set lower and upper limits for the loan amount you can request for. Each bank sets its own terms and conditions on the amount of loan that you can avail from them. The amount you can avail usually depends on three main factors; your educational or professional qualifications, your place or country of residence and you gross monthly and net monthly income (GMI and NMI). In the case of educational qualifications, if you’re looking for a home loan in India, you will have to be a graduate or higher for a bank to even consider you for a loan. Apart from that, your level of qualification also affects the loan amount you can avail. The same goes for any professional qualification you may hold. The next factor is your place or country of residence. Most major banks have their offices in many countries and the economic status of the country you’re residing in plays a major role in deciding the amount of loan you can request for. Depending on the relative value of the currency, financial situation existing in the country and a host of other factors, banks set a minimum criterion for earnings based on which you can apply for a loan. As it differs for each country, you should do research for the country you live in before applying for a loan. The final factor is your income. In most cases, banks provide for an advance of around 80-85% on the value of the property based on your gross monthly income. Usually, the maximum amount of loan a bank is willing to grant is in the range of 36-40 times your gross monthly income. In some cases the banks may also look at the ratio between your equated monthly installments (EMI) to your net monthly income (NMI).

What is the rate of interest and tenure of loans I can look forward to?

As an NRI is not working in India and it is uncertain for how long the person would be present abroad, there is a greater risk in the repayment of loans. It is for this reason that in the case of an NRI Home Loan the tenure and rate of interest differs from that of a residential home loan. While a person living in India can look forward to tenure of thirty years for their home loan, an NRI is restricted to tenure between five to fifteen years based on the bank and the loan amount. Also, it is usually found that an NRI will have to pay a further 0.25 – 0.50 % more on the base rate of interest as compared to a resident on a residential home loan.

What are the documents that I need?

The documentation required for an NRI home loan is different from a normal home loan. To apply for the loan you will need; copies of your passport, a valid visa and permit for your work, your employment contract, a work experience certificate showing the amount you’ve worked, your salary circulars, statements from the bank of your NRE or NRO accounts and if you are residing in the Middle East, you will have to provide your employment card as well. Although so many documents are required, submitting and having them verified isn’t difficult. Many banks have their branches present overseas and some of them even provide the facility of submitting your documents online. In case you would like a resident back home to do your submission, you will have to grant that person a Power Of Attorney so that they can complete the process for you.

How do I repay my loan and what happens if my status changes to reflect a resident?

In order to repay the loan, you will have to possess a non-resident external (NRE) or a non-resident ordinary (NRO) account. Payments will only be accepted from either of these types of accounts and payments can only be done in Indian rupees. If by any chance, during the process of repayment or anytime during this entire process you happen to become a resident of India and change your status from that of an NRI, the various aspects of the loan such as the loan amount, tenure and rate of interest will also be changed in order to reflect your new status.

Keep in mind that although the process is usually common across the different banks, every bank can have slight variations in their mode of operation. So it is best that you learn of these variations beforehand so that when you do apply for your loan, the process is streamlined.