India is one of the fastest-growing economies in the world. It is therefore not very surprising that the real estate market has become a potential investment option for NRIs. NRIs or non-resident Indians are defined as people who have left the country and moved to another nation for employment or people who have lived for more than 182 days outside of India during the preceding financial year.
These days, many NRIs are investing in properties back home. While many lenders, these days, offer home loans to NRIs, navigating the housing loan application process for NRIs can be daunting if one is entirely unfamiliar with Indian home loans and the loan application process. Housing loans for NRIs are similar to the home loans available to Indian citizens, with the key difference being that NRIs are expected to repay their loans at a higher home loan interest rate and within a shorter tenor. This article unravels the various aspects of NRI home loans.
Apply for NRI Home Loans: Here’s What to Keep in Mind
Before we get into the details of how to apply for NRI home loan, let us study the housing loan eligibility criteria that one must fulfill to be considered eligible for an NRI home loan in India.
- The most important qualifying criterion is that you must be able to establish your NRI status. As previously mentioned, NRIs are people who spend less than 182 days in a year in the country or have permanently moved to another country for employment opportunities. You must provide proof to establish that you meet this qualifying criteria.
- All lenders have age requirements that they must meet to be considered eligible for an NRI home loan. Most lenders require loan borrowers to be at least 21 years of age when applying for the loan. On the other hand, the loan applicant must be no more than 60 to 70 years old when the loan matures.
- You must be able to establish a solid and stable source of income. Further, your income should be sufficient to allow you to comfortably afford the burden of the home loan EMIs you have in mind.
- You must have an excellent credit score. To apply for NRI home loans, you must have a credit score in the range of 750 to 900.
Let us now walk the readers of this article through the NRI housing loan application process.
NRI Home Loans: A Step-by-Step Guide on the Home Loan Application Process
- Many banks and NBFCs operate in the home loan marketing space. So, all NRIs must first do proper research to decide the ideal loan partner for them. Shopping for the ideal home loan sanction amount, low home loan interest rate, and low processing fee, is crucial.
- Once you have decided the bank or NBFC you want to go with, the next step is to apply for a home loan. This can be done by filling out an online or offline loan application form. You will also be asked to submit certain documents. These are the documents lenders generally ask for home loans for NRIs.
- You will need to submit passport-sized photographs along with your passports and valid copies of your Visas
- Power of attorney document
- PAN Card of the loan applicant
- Address-proof documents, duly signed by the loan applicant
- Current overseas residential address proof document signed by all the loan applicants
- Details of the company where you are employed.
This list is non-exhaustive and banks and NBFCs can ask for additional documents. So, it’s always a good idea to request a representative of your lender to provide you with a complete list of documents you will need to submit to get approved for an NRI home loan.
- After your lender receives all the required documents, they will follow up with a document check where they will check each document carefully to ensure its authenticity.
- Once you pass the document verification stage, your lender will release the home loan sanction letter. This letter will detail the terms on which your lender wants to extend you a loan. However, these terms and conditions are not final and can be negotiated.
- Sign the final offer letter and once the money comes into your account, complete your property purchase.
This is the NRI home loan process in India. It is fairly straightforward, but it is a good idea to have an expert by your side to guide you through the legal aspects of the loan.