[vc_row][vc_column width=”2/3″][vc_column_text]Every year, the number of Indians leaving India for a job or to get settled abroad is increasing, and the ‘NRI’ (Non-Resident India) term is becoming an essential part of famous parlance. Every single Indian wherever they get settled, they want to be connected to their root. In India, a home back is one aid that emerges a feeling of belonging. And purchasing a house approximately involves applying for a home loan also. Home loan for NRIs Eligibility criteria may vary from a resident Indian home loan in different metrics, although the proceedings are easy.
Being an NRI, if you want to invest in a home, now is the best time to begin. With the real estate sector of India experiencing a cost alteration and suitable currency rates, you can do more research to find profitable deals. There are many reasons for NRIs to invest in real estate property in India. Now, the NRIs maintain a close relationship with India and show interest to invest in a property located in India. By doing this, they have the choice of coming back to their own country after retirement. The low value of the Indian currency, rupee against overseas currencies like pound or dollar makes them comfortable to invest in real estate.[/vc_column_text][vc_column_text]
[/vc_column_text][vc_column_text]For NRI home loans, there are some eligibility criteria that one must know before applying.
Employment duration and compensation: Normally, a salaried NRI must have spent at least one-year duration in overseas employment. However, all these qualification criteria may differ from one lender to another. Lending organizations pursue some specific minimum salary condition which differs for each & every lender. Employment payment and duration are critical metrics as the lender can get confidence regarding the job as well as income stability.
Credit rating and active obligations repayment record: A fine credit score as well as a faultless obligations repayment record introduces greater value to the financial profile of a home loan applicant and it helps to obtain acceptance of the application.
Loan tenure: Generally, the repayment tenure is from 15 to 20 years. However, some lenders may provide tenure less than 20 years but they provide a maximum age limit at the maturity consideration up to 70 years of employment tenure in some professions.
Documentation: Required documents include work permit or copy of visa, valid passport copy, employment contract, salary certificate, bank statements (NRO/NRE accounts), and work experience certificate.
Power of attorney: The home loan applicant can appoint any person among the relatives as the holder of the Power of Attorney (POA) in India to finish all the documentation procedures and formalities. The holder of the Power of Attorney is preferable to be a person from the same location where the home loan is applied.
NRO or NRE accounts are very much essential to process payments and spending the loan amount. However, for builder properties, maybe the disbursal debited straight into the account of the builder.[/vc_column_text][vc_column_text]
Rules and regulations
Recently the Government of India has made some changes to the Foreign Exchange Management Act (FEMA) because of which it becomes easy for NRIs to invest in real estate properties in India. An NRI can buy both commercials as well as residential property in India and there are not any rules on the number of properties they can buy. But there are some restrictions on buying farmhouses, agricultural land, and plantation lands. Only if an NRI has been inherited or been gifted by any Indian resident, then only they can be the owner of agricultural properties.[/vc_column_text][vc_column_text]
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Major points
An NRI doesn’t need any special authorization to buy any property in India but the payment of this kind of property can’t happen in any foreign currency. The deal can be finalized only in Indian currency which is received by general banking mediums. According to RBI and FEMA, the payment needs to be maintained in an NRE (Non-resident) account. The NRIs can invest just like Indian residents except for these few restrictions:
- RBI gives permission to National Housing Bank registered housing finance firms and banks to provide NRIs with loans to purchase real estate properties in India. These loans are called NRI Home Loans. Once the home loan gets sanctioned in Indian currency, it needs to be repaid in the Indian currency only. However, according to guidelines, the loan amount can’t be credited to the bank account of NRI directly but needs to be deposited in the account of the seller.
- Financial institutions can be financed approximately 80% of the funds through an NRI home loan. The remaining amount like down payment etc. needs to be provided by the NRI.
- As NRIs are staying outside India, they get the option of providing the power of attorney (PoA) to friends or relatives who is able to finish the property buying process in India. The PoA can be either normal or specific regarding the rights which your representative can do in your absence.
Stick to basic rules
A property can act as a strong tax-saving tool as NRIs get tax benefits the same as Indian residents. Under section 80 C, they can claim Rs. 1 lakh deduction. If you are an NRI, you have to stick to some protocols and these help you to explore the real estate market in India:
- Assure first that you decide the nature of the property you want to buy.
- Prior to the purchasing process, it is very much important to verify all the legal documents.
- Make sure that you examine the original title deed which may bear the previous seller’s name. To avoid mistakes, check thoroughly. In case the seller shows a photocopy rather than the original one, then there may be a possibility of fraud.
- It is good to take help from a lawyer to ensure that all the documents, as well as legal aspects, have covered during the purchasing process.
- NRIs can also claim a maximum Rs. 2,00,000 deduction in lieu of interest provided on a home loan. Under the 80C section, it is extra to the Rs. 150,000 tax exemption.
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Start investing today!
In the starting phase, maybe investments may sound frightening. However, whenever you invest in the right property, definitely you will get benefit from it in the long run. So, what are you waiting for? Start investing today and make your dream into reality.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_column_text el_class=”post-contact-form”][fc id=’2′ align=’center’][/fc][/vc_column_text][/vc_column][/vc_row]