home loans -
Documents required for Resident Indians as well as for NRIs for getting Home Loans are different in some respect. For NRIs Property Investment –
Eligibility Criteria of NRIs for Home Loan -
An NRI applicant is eligible to get a home loan ranging from a minimum of Rs 5 lakhs to a maximum of Rs 1 crore, based on the repayment capacity and the cost of the property, which although is variable by the priorities of the home loan provider.
Also Home Loan Tenure for NRIs is different from Resident Indians. An applicant will be eligible for a maximum of 85% of the cost of the property or the cost of construction as applicable and 75% of the cost of land in case of purchase of land, based on the repayment capacity of the borrower.However, a NRI can enhance his loan eligibility by applying for home loans with a co-applicant who has a separate source of income.
The rate of interest for home loans to NRIs is higher than those offered to Resident Indians. The difference is to the extent of 0.25%-0.50%. Some HFCs also have an internally earmarked ‘negative criterion’ for NRI home loans. As such, the NRIs who hail from locations that are marked as being ‘negative’ in the books of HFCs, find it difficult to get a home loan.
RBI Directive Loans -
The Reserve Bank of India (RBI) has clarified that the NRIs and Resident Indians can also acquire immovable property in India other than agricultural property, plantation or a farmhouse.
Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO), purchasing immovable property in India should pay for the acquisition by funds received in India through normal banking channels by way of inward remittance from outside the country. RBI has also issued certain directives for sanctioning home loans to Non-Resident Indians. The guidelines provided are –
RBI Directive Loans -
The documentation required to be submitted by the NRIs are different from the Resident Indians as they are required to submit additional documents, like a copy of the passport, a copy of the works contract, etc. And NRIs have to follow certain eligibility criteria in order to get Home Loans in India.
Another vital document required while processing an NRI home loan is the power of attorney (POA). The POA is important because, since the borrower is not based in India; the HFC would need a ‘representative’ ‘in lieu of’ the NRI to deal with and if needed. Although not obligatory, the POA is usually drawn on the NRIs’ parents/wife/children.
The documents needed for obtaining NRI home loans are:
Permission and Approvals -
Before a construction can begin, the builder must seek several permissions and approvals from relevant bodies. Without these clearances, the construction may come under litigation.