Nri Home Loans – A Detailed Guide

By Author: Shashank Bhaskar
Total Articles: 63
Comment this article

When we sit down to enlist our life goals, we often put buying a home at the top of the list. But in order to fulfil this goal, you may need to apply for a home loan. Lenders provide a principal loan amount and levy an interest rate. The loan can be repaid in pocket-friendly EMIs. These loans are provided to resident as well as non-resident Indians (NRIs). Here a detailed guide on NRI home loans.
Salient features of the loan
The following are the salient features of NRI housing loans

Lenders provide finance of 75% to 80% of the actual market value of the property you wish to buy.
Loans can be repaid in flexible EMIs over tenures of 20 – 30 years, depending on the lender.
Interest rates typically start at 8.60% per annum.
You can apply for the loan individually or jointly, preferably with an employed family member, for instance your spouse.

Prerequisites of the loan
Apart from fitting into the lender’s NRI house loan eligibility criteria, you must also ensure ...
... that you

Are stably employed for a minimum period of 3 consecutive years, preferably with the same company.
Have credit scores above 750 points out of 900 possible points to apply.
Have repaid all existing loans or not defaulted on any loans in the past.
Have repaid their credit card bills, preferably in full and without incurring interest.

Circumstances in which NRI house loan may be rejected
NRI home loans can be rejected under the following circumstances

If you are unable to show the minimum net monthly income required for by your lender.
If there are any gaps in your employment status in the last three years.
If you have failed to file income tax returns in India and your country of residence, in the last three years.
If you have served as a loan guarantor to an individual who has defaulted on repaying any loans.
If you fail to provide all the documents as requested by your lender.
If the lender does not approve of the property you wish to purchase.

Reasons to apply
Here’s why NRIs should apply for home loans and invest in properties in India:

The Indian real-estate market is booming currently.
The already high property rates may become unaffordable in the near future.
Your foreign currency income and stable employment, helps improve your NRI home loan eligibility.
Loans for NRIs are sanctioned at a much rapid rate than those for resident Indians due to the limited time they have on their visit to India.
You can get assistance throughout the loan process and the lender may even assign a liaison for you.
In your absence, your power of attorney can take care of the formalities related to the loan.

Things to remember
Before you apply for a home loan, you need to remember these things:

You should use NRI house loan eligibility calculator to check the maximum loan amount you are eligible for.
You should also use a home loan EMI calculator to calculate the exact EMI payable against the principal amount loaned over specific tenures and interest rates.
You have to pay different types of fees like loan processing fees, loan administration fees, property evaluation fees, and document verification fees and stamp duty charges.

Final word: As an NRI, you should have no trouble getting your home loan passed, if you just remember to all the information mentioned above. Before you apply for the loan remember to check the specific requirements of your lender. Get your documents in order and then apply for NRI home loans.