Home Loans for NRI's
An Indian Citizen who stays abroad for employment / carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. organisation and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non- residents). Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens (NRIs).
1: What is the maximum amount I can borrow?
You can avail of a maximum loan of Rs.1, 00,00,000 or 85% of the cost of the property, including cost
of the land, whichever is lower.
2: What is the loan amount I am eligible for?
Subject to the above condition, your repayment capacity will help decide how much you can borrow. Repayment capacity takes into consideration factors such as income, age, qualifications, work experience, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation, alternate employment prospects when you return to India and savings history.
3: What are the documents to be submitted along with the application?
The documents to be submitted include:
Employment/Residency related documents:
Employment contract (if the contract is in a language other than English, the English translation of the same attested by the Embassy/Employer should be given).
Latest salary slip.
Latest work permit.
Identity card issued by current employers.
Visa stamped on the passport.
Continuous Discharge Certificate (CDC) - (if applicable).
Overseas Bank Account Statement for the last four months.
Property Related Documents:
Receipts for payments made for purchase of the dwelling unit.
Copy of approved drawings of proposed construction/purchase/extension.
Agreement for sale/sale deed/detailed cost estimate from Architect/Engineer for property to be purchased/constructed/extended.
Allotment letter from the co-operative society/association of apartment owners.
Power of attorney
4: Who can be co-applicants?
Proposed owners of the property, in respect of which you are seeking financial assistance, will have to be co-applicants. However, all co-applicants need not be co-owners.
5: What is the rate of interest that will be charged on my loan?
The rate of interest will vary from 7% to 8% per annum depending on the Institution.
6: Any other charges are applicable?
At the time of making application for the loan a processing fee is payable. This will vary from 0.5% to 1% of the loan amount applied for depending on the Institution.
7: How is the interest calculated?
The interest calculation, of course holds the key to your cost. The uniformly followed system is to apply the interest rate at what is known as reducing balance. That is every time interest is calculated afresh, you are assumed to have paid up a part of the principal. So interest is calculated on the unpaid part.
However if the EMI calculations were on an annual basis, the principal portion of your loan of Rs. 20 lakh would be reduced by Rs. 13,644. But the interest calculation is done only once a year-that means the interest payment is a little higher. "The More often reducing balance is calculated the better you will be." So remember opt for the Monthly calculation whenever possible.
The shorter the period of the loan the higher the amount you pay each month. So pick your repayment capacity, and then work backwards to finalise your payback period. To calculate your payment plan your vendor will calculate your total liability, principal+ interest -- and then divide the figure into EMI's (Equated Monthly Instalment's). One off processing and administrative fees which will add about 2 percentage points to the cost of your loan will also have to be paid.
8: What is the maximum period in which I can repay the loan?
The period of repayment of the loan is normally in the range of three to 10 years. However the lender will endeavor to determine the repayment period to suit your convenience.
9: How do I repay the loan?
You repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement. EMI is payable every month, by the end of that month.
In respect of the period prior to commencement of EMI, you pay interest on the amount/s of the loan disbursed. This interest is called Pre-EMI interest. Pre-EMI interest is payable every month, by the end of the month, from the date of each disbursement upto the date of commencement of EMI. Pre-EMI is calculated at the same rate at which EMI is calculated.
EMI payments are to be made through post dated cheques from your NON-Resident (External) Account/Non-Resident (Ordinary) Account in India.
10: What is the size of the EMI?
The EMI is 1/12th the Equated Annual Installment. The size of the monthly installment comprising principal and interest depends on the quantum of the loan, the interest rate applicable and the term of the loan.
11: What security will I have to provide?
Security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds and/or such other collateral security as may be necessary.
12: When can I take disbursement of the loan?
You can take disbursement of the loan after the property has been technically appraised, all legal documentation has been completed and you have invested your own contribution in full. Own contribution is the total cost of the property less the loan amount availed.
13: In how many installments can the loan be disbursed?
The loan will be disbursed in full or in suitable installments taking into account the requirement of funds and progress of construction.
14: Can I repay my loan ahead of schedule?
Yes. You can repay the loan ahead of schedule, by remittances from abroad through normal banking channels, your Non-Resident (External) Account and/or Non-Resident (Ordinary) Account in India. Most of the institutions do not levy a pre-payment charge.
15: In what form can I make payments to the Housing Finance Institution (HFI) ?
Payments for fees, charges, and pre-EMI interest should be remitted to the HFI from abroad through normal banking channels or from the Non-Resident (External) Account/Non-Resident (Ordinary) account in India.
EMI payments are to be made through post dated cheques from your Non-Resident (External) Account/Non-Resident (Ordinary) Account. Cash payments will not be accepted.
NB: The above details are subject to change. Kindly refer to the respective bodies for complete and up-to-date information