Home Loans For Nri: What You Must Know

By Author: Vijay K Shetty
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Non Resident Indians (NRI) can get loans for building a house or for buying a plot or house in the country.  As per as RBI Guild lines define for NRIs, "An Indian citizen who holds a valid 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."The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulatory Act, 1973.

Interest rates for NRI loans do not differ much from that of the Indians living in this country.  But the loans will be approved only for a short terms. NRIs will obtain only 85% of cost of home as loan total. The size of the loan depends upon the borrower's reimbursement capacity.  Upto 36 times of the gross monthly earnings of the applicant may be issued as mortgage.  However, there is a certain maximum limit also. Estimation of eligibility is entirely same as that of Indians living in the country. 

NRIs can take the loans on this following rate of EMI to be payable, as decided by banks valid for 5, 10, ...
... and 15 & 20 years. Rate of interest varies between 7.5-8.50 %.

EMI is the amount to be repaid to the bank every month/bimonthly/Quarterly. Rate of interest is subjected amount charged every year extra then respective loan figure. Under NRI services, banks have to take care about the documents for ensuring the eligibility for issuing loan.

Property Documents: (Mandatory for application Under RBI Act)
· Original title deeds of the property with a minimum tracing period of last 13 years.
· Impediment Certificate for the last 13 years.
· If there has been a contract of sale or construction, documents need to be furnished.
· Granted plan or license.
· ULC authorization or conversion order.
· Receipts for having invested the periphery money through standard banking channels from the Non-Resident (External) account in India and / or the Non-Resident (Ordinary) account in India.
· Recent tax paid receipt.

The loan can be repaid as EMI's (easy monthly installments) through Non - Resident Ordinary (NRO) bank account or the Non Resident External (NRE) ban account.

The FDI Policy currently permits FDI till 100 percent from a foreign/NRI investor. Banks have attractive NRI housing offers to accommodate the housing needs of NRIs & their belongings. NRI's can use home loans to construct a new house or flat, buy an old house or flat, renovation of a house or repair work.

Vijay K Shetty, Platinum Level Author.

Get more information on NRI Home Loan, Certificate of Deposit