4 things to keep in mind before going in for an NRI Home Loan.

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.

Good luck and all the best!

Why owning property in India is just as easy for NRIs as it is for residents.

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.

All the best!

See how the internet is helping NRIs buy their dream home.

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.

All the best!

4 Useful Facts about NRI Home Loans You Must Not Miss.

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:

1. 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.
2. 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.
3.  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.
4. 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.

{Source: http://blog.loanbaba.com/4-useful-facts-about-nri-home-loans-you-must-not-miss/}

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Considering an NRI home loan? Bear These 5 Crucial Points In Mind

As a Non Resident Indian (NRI), you have migrated to a foreign country in search of better job prospects. Over the years, you may have earned enough to consider buying a home in your own country. Naturally your first step is to look for the appropriate NRI Loans in India. It is important to know and understand your eligibility, the kind of loan you may get and the repayment schedule involved. We will tell you all you need to know.

1. What Kind of Property Loans Can You Opt for?

As an NRI looking to invest in property in India, you can consider applying for a loan for the following kinds of homes:

•  A ready to move in property
•  Property under construction
• Property to be constructed on a plot of land already owned
• Upgrading a currently existing property

2. What Loan Amount Can You Look Forward to?

There are a couple of considerations based on which the loan amount provided is decided upon:

• The educational qualifications of the loan seeker. Being a graduate or higher in terms of qualifications will allow an NRI applicant to be eligible for a loan.
• The income of the NRI applicant. Here the Gross Monthly Income (GMI) is taken into consideration. In some cases, a comparison is made between the prospective Equated Monthly Installment (EMI) and the Net Monthly Income (NMI) of an individual.
• Most banks have a few additional criteria based on job profile, country of residence etc. these are factors that you will have to research based on your individual case.

3. Loan Tenure and Rate of Interest:

NRIs may avail a home loan only for a restricted period of 5 to 15 years. In comparison, an Indian resident may apply for a loan with tenure up to 30 year. Any extension is based on the discretion of the bank. The margin of interest is also higher for an NRI Loans and is usually around 0.25% to 0.50% more on the regular rates charged.

4. Documentation Requirements

The documentation for an NRI applicant is slightly different from that of a resident and may include the following:

• Copies of passport
• Valid work visa and permit
•  Employment contract
• Work experience certification
• Salary slips
• Bank statements of NRE or NRO accounts
• Applicant from the Middle East has to include employment card copies

Most banks have overseas branches in several countries and you are likely to find one close to you for submission of your documents. For a few other banks, you will even be able to make your submission online. You could also consider giving a local resident a Power of Attorney to help facilitate the process.

5. Loan Repayment

When you apply for a loan as an NRI, you will be able to repay it only from Non-Resident External (NRE) or Non-resident Ordinary (NRO) account. All repayment will have to be done in Indian currency.

During the course of repayment should your status change back to that of an Indian resident, the loan amount, tenure and interest rate will be reworked to fit your new status.

Though the process is relatively hassle-free, do note that every bank may have a few requirements that vary from the norm. It is advisable to chalk out things in advance, make essential enquiries and have the documents ready. It is best that you consult the bank that you plan to approach and have your documentation in place accordingly.

Summary

• An NRI may apply for a home loan in India based on certain criteria
• The tenure is lower than that provided to a resident and the rate of interest marginally higher
• The loan may be repaid only through a NRE/NRO account in Indian rupees
• Should the status of an NRI change to a resident, the loan will be reworked to match the new status

{Source: http://www.vakilhousing.com/considering-an-nri-home-loan-bear-these-5-crucial-points-in-mind}

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Know Home Loans Housing Loan Finance In India

Saving up for your dream home? Home Loans can make this dream a reality. Below are the FAQ’s before going in for a Home Loan.

What is a Home Loan?

Home Loan or funding in the project to the buyer is one of the most important factors for the sales of the property. 95% of the properties are bought on home loans, with the increase of all white transactions in Indian market some of the buyers are forced to take home loan as they don’t have sufficient money to pay the builder. Normally the loan provided in case of a residential property is maximum up to 75% of the property value and in case of commercial loan property it is around 60% of the property value. NRI’s are not eligible for commercial loans. The banks never finance 100% of the property value as they want to keep margin money as a security in case there is a default from the buyer of the property or if the market crashes and the existing vale of the property goes down.

What are the different types?

Through a Home Loan, one can purchase or construct a new house/ apartment; a Home Improvement loan is offered to those who wish to renovate their houses; a Home Extension loan is for consumers planning to add extra space to their house such as a new room or a new wing; a Loan against Property is offered for a individuals seeking loan against an already existing property; a Land Purchase Loan is provided to consumers buying land as an investment, maybe to build a house later on and a Balance transfer loan is basically a home loan to pay off an existing housing loan for nri as this enables you to avail a loan with a lower interest rate.

What is the typical repayment duration?

Home loans are given for a minimum period of 1 year and maximum period of 30 years; the tenure of loan depends upon the age of the individual. The maximum age for taking a loan is 65 years i.e. if someone is 55 years old then he or she can take a loan with tenure of maximum 10 years. If somebody wants to increase the tenure he has to make a co-applicant (Family member) with a younger age.

What are the types of interest rates?

The Rate of Interest on housing loan for nri depend on repo rate, reverse repo rate & CRR (Cash Reserve Ratio), all the three are governed by RBI, changes in any of the three leads to the change in PLR (Prime Lending Rate) which leads to the change in rate of interest. PLR is normally reset in every three months.

Rate of interest are of three types –

Fixed rate of Interest - which means that the rate of interest is fixed for entire tenure and is not affected by the change in PLR.

Floating Rate of Interest – which means the rates of interest varies with the market condition and changes with the change in PLR.

Fix Loty(Partly fixed & Partly Floating) Rate of Interest: - which means that the rate of interest is fixed initially for the first 2 to 3 years and then gets converted to floating rate of interest.

What are the tax benefits on Home Loan?

There are certain tax benefits available on your Home Loan. The Interest paid on housing loan for nri is eligible for an exemption for income tax purpose, the maximum exemption allowed in a financial year is 150,000/-, however no exemption is

allowed to the person in case of a under construction property. The buyer can claim the exemption after the completion of the property equally in the next 5 years after completion. For example the possession of the property happens in 3 years and you took the loan in 1st year and paid interest of 25,000 in the first year, 35000 in the second year and 40,000 in the third year, the total interest paid by you in three years before completion will be 100,000. Now you can claim it equally in the next five years i.e. 20,000 each, in the fourth year if you pay an interest of 60,000 then you can claim an exemption of 80,000 (60,000+20000), the maximum exemption cannot exceed Rs.150,000 in a financial year.

NRI’s don’t get any income tax benefit for the interest paid on home loan.

Process of Sanctioning and disbursal of Home Loan

Sanctioning of Loan: - A buyer depending upon his classification i.e. salaried, self-employed, NRI needs to deposit all the documents required with the respective bank from which he needs to take the loan. Bank does its legal formalities and takes around 7-10 working days for the sanctioning of the loan if the buyer is found eligible; if the loan is not sanctioned then all the documents are returned to the buyer.

Disbursement of Loan: - Bank normally takes around 7-10 working days for the disbursal of the loan once it is sanctioned. The following documents are required by the bank for disbursing the loan: -

Original documents of the property – Builder Buyer Agreement, Allotment Letter & original payment receipts.

Lien mark Letter: - It is a request letter by the buyer of the property to the builder of the property allowing taking a loan.

Permission to Mortgage: - This document is required by the bank from the builder that the builder has no objection in allowing the buyer to take a loan on the said property.

No Objection Certificate (NOC): - In many cases a builder takes a loan for a bank for the complete project i.e. the entire project is mortgaged with some bank by the builder. In this case if a buyer wants a loan then a NOC is required from the first bank by the second bank.

Indemnity Bond: - This is normally required by the bank in case of down payment cases, it says that the bank will not be responsible if something goes wrong with the project in future for example if the project is scrapped then the bank has full right to recover the loan from the buyer of the property.

Tripartite Agreement: - It’s an agreement made between the builder, bank & the buyer mentioning the terms and condition of the purchase.

Documents required by the Buyer of the property For Approval of housing loan for nri (NRI’s)

Only NRI (Non Resident Indian), PIO (Person of Indian origin) and OCI (Overseas Citizen of India) can take home loan in India

Employment Contract

Latest work permit

Visa stamped on passport

Salary slips for past 6 months

Overseas Bank Statement for past 6 months

NRE/NRO Bank Statement for past 6 months

ID card by employer

Official Email Id

Credit Bureau Report

Company Profile

Continuous Discharge Certificate (in Merchant Navy cases)

Power of Attorney as per Bank’s format, it’s mandatory for a NRI’s to give his Power of Attorney to any of its family member or friends for availing housing loan for nri.

Important Points Relating to home loan

Co-applicants can be only in blood relation, the idea is clubbing the income of the applicant and co-applicant so as to facilitate them to get a higher loan amount, however, combinations of father – daughter & brother – sister are not allowed but combination of husband & wife is allowed.

A buyer can avail only three home loans at one time.

NRI’s don’t get any income tax benefit for the interest paid on home loan.

NRI’s, PIO, OCI living in some particular countries are barred from taking housing loan for nri for example NRI/PIO/OCI of Pakistan, Bhutan, Bangladesh, Afghanistan, Sri Lanka etc. are barred from home loans in India

Self-employed NRI’s don’t get home loans for buying Indian Property.

Funding of a project from nationalized banks normally starts at the advanced stage of the project.

{Source: http://www.1stkeys.com/blog/27/know-home-loans-housing-loan-finance-in-india.htm}

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