Being able to own the perfect house is a dream that is cherished by everyone. Depending on your choice and decision, though, an ideal decision can be to build that home in your own country. For Non Residential Indians or NRIs, there are a host of NRI loans available for building a house or for buying a plot or house in the country.
Non Resident Indians are currently recognized under the Foreign Exchange Regulatory Act, 1973. With that recognition, it may be a wise decision to get an NRI home loan to help make your dream a reality. With the real estate industry in India booming, it is recommendable for Non Resident Indians to invest in their home town, not only to capitalize on this opportunity, but also to ensure that foreign capital can be pumped into the country. While getting an NRI home loan may seem simple, there are a few steps that you should keep in mind:
Here are a few points that need to be taken to get a quick NRI home loan:
You can only capitalize on an NRI loan provided you have a valid passport as well as other pertinent documents handy. It is also mandatory for the applicant to be a graduate of 21 years and above with a job at hand. A steady income is essential as the amount will only cover 85% of the cost of home as total NRI home loan. While researching about mortgage, bear in mind that up to 36 times of the gross monthly earnings of the applicant may be issued. That being said, it should also be known that there is a certain maximum limit also. Estimating the eligibility of the applicant follows the same steps as what is done for Indians living in the country.
You will need to pledge certain assets as collateral before applying for a loan. These assets can come in the form of shares, debentures or other collaterals. It should be noted, though, that foreign company shares are not seen as acceptable forms of collateral. Making the use of Indian company shares is mandatory against an NRI loan.
Using an NRE account is mandatory while carrying out all the necessary bank transactions. An NRE account helps transfer all profits gained on these funds abroad. Approach only a licensed bank which is allowed to offer a House Loan. The RBI currently offers these licenses to the banks and authorizes them to deal with NRIs.
The interest rates levied on NRI loans are not different from the rates issues to Indians living in this country. Banks and financial houses, as part of their RI services, have to take care of the necessary documents to ensure eligibility before issuing an NRI loan. While the interest rate on an NRI home loan can vary based on several factors, by and large, they range between 7.5-8.50 %.