New Property has always been a great investment, and even more so for NRI’s, who may not live in the country but have the spending power to Invest for a secure future.
While it may seem like a great idea, home loans for NRIs can be quite challenging. Let’s break it down to explain the process a little better.
First, let’s look at the prerequisites. To apply for an NRI home loan, you must have at least one year of salaried work experience overseas, or two years if self-employed.
Secondly, you must have a co-owner or co-applicant of the property who is a resident of India.
Thirdly, you must be at least 21 years old or above to buy property in the country.
While applying for a home loan, your salary does come into play. Each bank and financial institution has salary requirements and norms. Before you apply, be sure to explore each of these to understand which one works for you the best.
Home loans can be applied from anywhere in the world, as long as you have the necessary documents in place. Loans come with a monthly interest rate and the rates can differ as per the RBI guidelines. The loans can be paid back monthly as an EMI or annually, depending on the terms and conditions.
For those who are salaried, the tenure for complete payment would be 30 years, and for those who are self-employed, 20 years.
An important fact to keep in mind is, NRIs will be liable for property tax in India. This means, that along with paying taxes in their residing country, they will also have to pay Indian taxes. While NRIs earn in a foreign currency, they will have to keep in mind exchange rates and keep track of every tax policy in India.
Among the many documents required for applying for the home loans, be sure to keep handy valid passports, employer IDs, proof of income proof of Income-tax, bank statements for 3 months, salary slips, proof of foreign residence, and employment contracts!
Once you have all of the above in place, it’s time to apply! At the time of application, choose a home loan lender which you feel is trustworthy and reliable. Once you have this selected, choose a plan that fits best with your needs and finances. Post this, you must select your co-applicant or resident, who will then have to issue the power of attorney in his/her name.
When you have the power of attorney selected, the next step would be to visit the Indian Embassy in your country, where you can collect the power of attorney in the format your lender has recommended, which will then need to be signed by the co-applicant. Once done, the co-applicant will need to sign the form, and the Indian Embassy will add a seal of approval to it!
While these steps maybe be complex, it is always advisable to have an assistant or an agent to guide you through every step of the process, for a smoother outcome