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A Checklist For NRIs Seeking Home Loan In India

India's real estate industry has become a lucrative investment destination for Non-Resident Indians (NRIs). In the past few years, the number of expatriates putting their money into the real estate of the country has increased. Also, some of the investment-friendly measures implemented by the new government have boosted investor confidence.

However, in the lack of a well-defined regulator at the moment, NRIs often find themselves facing an absence of accountability and legitimacy here. They are also not commonly used to the different rules and regulations relating to home loans, qualifications, applicability etc.

If you are an NRI and going to apply for an NRI home loan in India, this article lists a few things for you to keep in mind during application.

  • Passport and visa information as part of the Know Your Customer (KYC) requirements.
  • Correct information of your permanent address in India
  • Appointment letter, work permit, work experience certificate, and contract of employment.
  • Salary statements of Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts backing these are also required.
  • Address proof, verified by your employer, along with the tax return statements from the country of residence.
  • To ensure eligibility for the loan, you will need to request a certificate of qualification. Besides, General Power of Authority (GPA) should be appropriately notarised in bank format.
  • A co-applicant and GPA is mandatory for home loan applications by NRIs in India. With some cases, a GPA holder should be either a co-applicant or a guarantor of the loan. The loan guarantor is a must when there is no resident as co-applicant available.
  • Your income and educational qualification level play a critical role in deciding on eligibility for the loan. Graduation is the minimum qualification you must possess while applying for NRI Housing loans.
  • Eligibility for the loan depends on whether you are on deputation or have been permanently employed in a foreign country. Eligibility income can also include both repatriate income, and that received in India. Banks here take the net income (i.e., income left after paying taxes abroad) into account when deciding on eligibility.
  • An NRI home loan is shorter than an average home loan. The explanation for this is that NRIs ' repayment ability is expected to be higher than a resident of India. Mostly, banks offer NRIs home loan over a 15-year term.
  • The loan repayment must be done in Indian currency and can only be paid through NRE or NRO accounts with foreign remittances. In the case of NRIs, the risk of bad loans is not high, as the property is in the native land and can be confiscated at any time by the bank.
  • What many NRIs are unaware at the time of the loan disbursement, the GPA holder must be present in person, at the bank premises. His signature on disbursement documents is required, as the principal applicant is not physically present in India.