NRI seeking a home loan in India.

India’s real estate market has always been a lucrative one for NRIs for investment. Indian residential market is driven by rapid urbanization, positive demographics and relatively stable prices. Therefore, more and more expatriates are fueling in their money in the country’s real estate market.

But due to absence of well-defined regulator, NRIs sometimes face with a lack of transparency and credibility. There are used to the various rules and regulations for home loan, eligibility, applicability, etc.

There are leading government and private sector banks /finance companies that offer NRI Home Loan with affordable interest rates of 8.75 to 9.50 with a mere processing fee of a just 1.25 on the loan amount. You can qualify for a loan amount of around minimum Rs 5 lakhs to 10 crores.

Here are few tips to keep in mind while taking NRI Home Loan:

Eligibility

Your level of income and educational qualification play important role in deciding amount you get qualified for. Graduation is the minimum qualification you must hold to apply for housing loan. Basis of eligibility would to understand if you’re on deputation or employed permanently in the foreign country. The income for eligibility can included both repatriate income as well as that earned in India. Banks or finance companies will take into account the net income when deciding on eligibility.

Documentation

Documents required while applying for housing loan will include passport and visa forms as part of the Know Your Customer (KYC) exercise; details of your permanent address in India; and deputation or appointment letter, work experience certificate, work permit and contract of employment.

Your salary certificates and statements of Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts supporting them will also be needed. A foreign land addresses proof, verified by your employer (i.e. over mail), along with the tax return statements from the foreign land has be produced. Also, General Power of Authority (GPA) in the bank’s format should be duly notarized.

Co-Applicant

Co-applicants are excellent source of enhancing your income and get higher loan eligibility for your housing loan. Experts’ advice, a GPA holder either should either be a co-applicant or guarantor to the loan, with certain exceptions. Guarantor to the loan is requiring if the local residents is not available for co-applicant.

Tenure

Tenure of an NRI Home Loan is little shorted compared regular home loan. This because, banks and finance companies feel their NRIs have a good earning source and therefore their repaying capacity is stronger compared to Indian Nationals. Most, bank or finance companies give a period of around 15 years for loan repayment.

Ratio

Loan-To-Value (LTV) ratio is the mortgage amount to the appraised value of the property that you wish to purchase. Lenders will allow 80 to 85 % of LTV to NRIs, subject to your monthly income. It’s important LTV value while availing your NRI home loan.

Check if the Indian bank or finance company that you avail a loan has a foreign branch in your current country of residence. It helps you to apply for the loan and avail the same without having to come to India. Some banks or firms have branches in foreign countries. When you visit the nearest branch they will help you co-ordinate for the entire loan process in India right from approval, disbursement right up to the repayment procedure and collection of your property documents.