Plenty of NRI’s who’ve travelled abroad are looking for ways and means to invest in financial products that will earn them an income. Out of the several available options, residential properties have proven to be the ideal investment option.
In order to finance this purchase, you can opt for NRI home loan that will offer you the ideal financial convenience and flexibility. Not only does it cater to the needs of NRI’s such as yourself, but it is also designed to offer the ideal financial benefits at the same time.
So if you are planning to purchase a home with the NRI home loan, here are a few factors on the checklist you need to tick off:
Check your official NRI status: The RBI defines an NRI as an individual who holds a valid Indian passport. Additionally, the individual should be emigrating abroad for employment purposes, or to carry out any business, in a duration of stay that is uncertain. It is these individuals who are employed or carry out business outside India who can apply for the home loan for NRI’s under this scheme.
Maximum loan amount: While you may be able to apply for the loan, the amount you get in the loan will differ on certain factors. For one, your educational qualifications and income will play an important role. Normally, the standard rate for home loans extends to 80 to 85% of the value of the property you want to purchase. However, this will also depend on your monthly income. The maximum a loan amount that will be granted to your will be around 38 to 40 times your gross monthly income. However, some financial institutes equate a calculated EMI by your net monthly income. Even the location of your current employment will be taken into consideration. If you are earning in the Middle East or Europe, you may be viable to get a loan amount that is high.
Loan tenure:The Home Loan interest rate in India for NRI’s is normally higher that the interest rates that are offered to residents. This is due to the increase in the risk factors, and short tenure will be elements to be considered. Normally, the difference usually ranges from 0.25 to 0.5%.
Documents Required: Like any other loan, when you apply for the NRI home loan, you will need to submit a certain set of documents. They will include a copy of your passport, visa, employment, contracts, work permits, salary slips and your NRI bank account statements. You may also need to submit your employment card, especially if you are working in the Middle East.
Repayment of loan: The down payment and the repayment will need to be done in the Indian rupee and not in any other currency. Additionally, the transactions would need to be made through your NRI account with the remittances made from abroad. In the event, your status changes from NRI to the resident Indian, the terms and conditions of your loan will be revisedin accordance with your new income.