Whether you are a Vijay Desai, a retired stock exchange broker living in Mumbai’s Kalbadevi Road or a Rima Mukherjee, a head honcho in one of Dubai’s leading recruitment company, the desire to own a home is ubiquitous. Magicbricks data indicate India as a popular investment avenue not just with resident Indians but also with Indians posted offshore or on secondments to international destinations. United Arab Emirates, United States of America and United Kingdom are the leading countries who look up for realty updates in Magicbricks. If you are planning to apply for a home loan while posted abroad, there are a few things which you should know.
One needs to be eligible for home loans. A home loan is sanctioned to the NRIs to purchase a house either ready-built, under construction or from a second owner or for if you are building a property on a plot of land. One can also avail financial services to purchase a plot of land allotted by a society / development authority or for redecoration or upgrade of an existing property in India.
Are you eligible to apply for a NRI home loan? Overall, the qualifier is the same for resident Indians and NRIs. In the case of the latter, the applicant has to be a graduate; should have requisite employment documents as a proof to his/her work experience; probability of continuing abroad for the loan tenure and probability of servicing the loan with an extended tenure in case you have to return to India. To spend in an immovable property in India, you should have an Indian origin (PIO) - held Indian passport at any point in time; or your father or grandfather was a citizen of India. You cannot be a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan to invest in the country.
Check for documents that need to be submitted. Usually, a copy of the passport and works contract is mandatory along with the power of attorney (POA). The third element is crucial as the borrower is not based in India and in such a scenario; the HFC would need a representative 'in lieu of' the NRI to deal with as required.
Normally, five years is the repayment period of NRI home loans. Some Housing Finance Companies extend the term to seven years. EMI is the popular choice of refund, which begins only after the entire loan is disbursed. If it is a case of part disbursement, normal interest rate would be levied the availed loan amount. The mode of payment is by way of direct remittances from abroad through normal banking channels or from such accounts as may be permitted by RBI from time to time. NRO, NRE, NRNR and FCNR accounts are some ways of payment. However, these accounts change on the basis of RBI permissions to each HFC.