A complete guide to understand NRI Home Loans

An NRI or PIO can purchase both residential and commercial properties in India. Although property prices have significantly risen in the past few years, investing in real estate is still an affordable choice for Indians living abroad thanks to the depreciation of our rupee against the US dollar. Making the whole process lot easier is the availability of NRI home loans. With foreign investment in the Indian real estate on the rise, you find that several banking and non-banking institutions are offering you convenient home loans.

Several rules and rather relaxation of regulations has further made it easier for NRI’s to invest in India. The RBI has eased the norms that were earlier mandatory and made the process of purchasing properties cumbersome. Permission from the Reserve Bank of India is not required anymore.

Some basic research to be undertaken:

• An NRI wanting to buy a property here needs to understand the legal and financial framework that binds these transactions.
• A thorough research on the real estate market needs to be conducted pre-hand. There have been several instances of NRIs being given higher quotes compared to domestic buyers. So, keep caution.
• The registration cost, stamp duty (that varies from state to state) and the service tax are some other important points to keep in mind.

As an NRI, you have plethora of options when it comes to choosing the right institution for your NRI home loan. A good research should help you make the correct choice.

Loan amount: As per RBI guidelines, NRI home loan amount cannot exceed 85% of the Total Consideration Value of the property. Look for an institution that will offer you the maximum loan. Also, you can apply for a loan along with a co-applicant who has to be your close relative.

Loan eligibility: Every institution has their guidelines when it comes to approving your loan request. Prior research through websites and other resources will help you understand the essentials. You need to keep a check on your CIBIL score. Your existing liabilities or loans may affect while applying for your NRI home loan.

Loan documents: Institutions strive to make the whole procedure of loan documentation as convenient as they can. Right from the documents required and transfer facilities to the safe storage of your documents, you can hope for the best treatment. Application form, Identity proof, Residence proof, passport-size photographs, salary slips (for salaried individuals), contract slips, Bank statements are some of the documents that are required.

Interest rate: An institution may offer adjustable interest rates or fixed or both. It is up to your requirement and financial situation to decide the best option. With an adjustable rate, an increase or decrease will affect the principal amount and the loan tenure. Changes in the interest rate will determine your EMI. If the rate increases, the interest amount in the EMI will increase while the principal amount will decrease. Along with this, your loan tenure will also extend. And vice versa when the rate dips.

Moreover, companies offer complete NRI home loan guidance to fast-track ambitions of owning a property in India. With such convenient facilities and quality customer service, home loan for NRI will eventually pave way for tremendous growth of our real estate market.

I'm a financial advisor with an experience of more than 5 years in a href=https://www.indiabullshomeloans.com/Housing Finance Companies. I have worked for topmost financial firms in India.