A Guide to Getting Your Home Loan Property in India as an NRI

For several Non-Resident Indians or NRIs, buying a home in India is not just a means to stay connected to their family in their native land but also a matter of pride. Today, many NRIs prefer investing in real estate property so that they can eventually settle down with their loved ones during their old age.

To help and encourage the NRIs to invest in India, many banks and non-banking financial companies provide special home loan offers. If you are an NRI and want to purchase a property in India, you must be aware of the different aspects, including the home loan process, documents required, eligibility, etc.

The process of buying a property and applying for a home loan may seem overwhelming as a first-time buyer. But don’t worry, the following guide will help you ease through the process.

Eligibility Criteria

If you want to avail of an NRI home loan to fund the purchase of your dream home, you must be aware of the eligibility requirements, which may vary from lender to lender. The eligibility criteria for NRI applicants are different from the Indian residents. But generally, most lenders have the following requirement –

·You must be self-employed or a salaried employee with a steady income source.

·You must be aged between 18 and 45 years at the time of applying for the loan.

·You can apply for a NRI home loan to purchase a new ready-to-move-in property or land where you want to construct your home.

·You can apply for the loan individually or opt for a joint loan with any of your family members.

What are the documents required to avail NRI home loan?

When you apply for a home loan, you must comply with certain documentation. The lenders require you to submit specific documents to verify your claims and financial profile. While the document requirement varies from lender to lender, the most common requirements, include –

·Identity proof

·Residence proof

·Proof income

·Property allotment letter received from the lender or buyer’s agreement

·Copy of valid passport and visa

·Cheque for paying the process fees

·Photographs

If you wish to appoint an Indian resident to take care of the property or handle the home loan process on your behalf, you must issue a power of attorney in their name.

What is the maximum amount you can borrow?

The majority of the lenders in India provide loans up to 90% of the property value. You may pay the remaining amount from your pocket, which is called a down payment. You must pay this amount upfront, and it is a part of the home loan application process.

What is the maximum repayment term for an NRI home loan?

For Indian residents, the maximum repayment term is 30 years. But for NRIs, most lenders have a smaller repayment tenure of up to 20 years. Generally, the lenders decide the term based on your income, age at the time of loan application, age of the property, etc.

Is a home loan eligible for tax benefits?

Yes, you can claim tax benefits on home loans in India provided you file your tax returns in India. The principal amount you repay is eligible for tax benefit to the tune of Rs. 1.5 lakhs under Section 80C of the Indian Income Tax Act. Additionally, you can claim a benefit of up to Rs. 2 lakhs on the repayment of the interest amount.

Final Word

Today, getting an NRI home loan is easy. But it is better to do your research well about the different aspects of the loan and make an informed decision to avoid any legal hassles in the future.