When NRIs wish to buy homes back home

A primer on how NRIs can apply for a home loan in India, and how to ensure a hassle-free application process.

Wherever a person may be in the world, there is just no place like home! This is particularly true of NRIs – they live abroad, earn handsome salaries and have a good life. But yet, the pull towards their motherland is strong, partly because they have family and friends in India. Besides, isn’t it true what they say about taking an Indian out of India, but India never leaving an Indian?

The most tenable connections that NRIs build with their homeland come via investments made in India. Chief among these are land and house purchase deals. Several NRIs invest in property in India every year, through a family member or a designated power of attorney. Recognising their interest in property purchase here, the RBI has also streamlined the home purchase process for NRI customers.

Today, banks and financial institutions offer customised home loan products aimed at NRIs’ home purchase. If you are looking for a suitable home loan, choosing the right lending institution is crucial. Look for –

• Easy application process – the lender must offer the opportunity to apply for the loan online.
• Quick and transparent processing – the lender must give a full schedule of processing charges upfront, and explain the processing timelines.
• Rapid turnaround time between application and approval – this is the amount of time that the housing finance company takes to check the property and applicant’s credentials.
• Fast loan amount disbursal – NRIs normally visit India for a short duration of time, so it is ideal if the loan disbursal is done as quickly as possible.

But first…

Checking the NRI home loan eligibility is the first step in the loan application process. You can fill out a simple form on the lending institution’s website and provide your contact details. This will initiate the loan application process.

Meanwhile, check the NRI home loan eligibility using the portal’s online calculator. The eligibility is computed subject to certain criteria, such as:

• Age
• Citizenship status
• Income
• Whether the applicant is working abroad for at least one year prior to applying for the home loan
• Whether the applicant is an Indian passport holder, showing NRI status on employment/assignment/deputation.

The NRI applicant can increase their home loan eligibility by adding a co-applicant or co-owner on the same property. However, this co-applicant or co-owner must have a regular income, and they can be a parent, sibling, spouse or adult child.

Once the application is approved, the loan is split into two parts: the NRI applicant’s personal contribution to the house purchase, i.e. up to 20% of the property value (as mentioned in the property agreement papers) plus the housing loan, which is up to 80% of the property value for loans amounting to Rs 75 lakh and below, or 75% of property value for loans exceeding Rs 75 lakh. 

5 elements to look for in a home loan

We present five loan features to understand and look out for when you apply for the housing loan.

Are you about to take a home loan for the first time? You must have many questions about the process and what to expect. Allow us to simplify the concept of the home loan by presenting the following five features of a home loan:

1. Loan eligibility. Start by finding your home loan eligibility. This is the amount of money that your bank will give you as the loan amount, based on certain factors: income, age, number of working years left, credit history, place of work, etc. When you input these figures in a home loan eligibility calculator, you get the loan amount that the bank will offer you. Knowing your eligibility helps you rejig your own finances, and also shortlist the properties that fit your budget.
2. Interest being charged. The bank housing loan is offered at a certain rate of interest. Post-demonetisation, banks lowered the lending rate on housing loans. Thus, bank housing loans are now offered at rate of 8.65% to 9% across major banks in the country. Examine the interest rates across different banks before making your choice. 
3. Type of interest being offered. The bank housing loan will be offered at either a fixed rate of interest, or a floating rate of interest. Under a fixed rate of interest, you will continue paying the same amount of EMI throughout the tenure of the loan. As opposed to this, you will pay the interest on the reducing principal as the loan is being repaid over the years. Most people opt for the floating rate of interest because it results in lower total repayment to the bank. 
4. The evaluation process. After you apply for the home loan, the bank examines your credentials, the property you wish to purchase and also the property document. This process may take a while to complete, since the checking is done on-site by legal and construction experts. If you are in a hurry to close a deal on a house, it is better to apply for the loan as soon as possible so that you can get the funds disbursed quickly. Premier banking institutions conduct these checks quickly so that customers are not hassled by delays.
5. Processing fees.These are fees that are paid towards getting the final disbursal. The fees include application processing fees, legal evaluation fees, stamp duty and registration charges (after paying at least 20% of the property’s price), pre-EMI cheque, etc. Get the entire spectrum of fees and charges and add them up before you apply for the bank housing loan.If you have a relationship with your bank, you can get some of the charges waived off.

Dreams can be achieved!

Nowadays, dreams regarding homes and own residences are quite natural but setting the goal of achieving them without any hazards has become one of the rarest things. But various renowned banks will help you realize your dreams more easily by facilitating home loans. Many think it impossible to get a home loan, and hence, dreams and desires regarding homes become quite difficult or almost unattainable. 

Premier Banks have been helping in the marketing and shaping of the global growth which in a way directs path for many new golden opportunities to increase or grow your wealth, without much complexity. The Auto Saver mechanism enables higher interest rates for all fixed deposits on the idle funds that you possess in your savings bank accounts. Also, home loans in India have become something of a moot point in recent times though several banks take all the steps to make it possible. Today, banks offer home loan solutions through online mechanisms and operations are pretty uncomplicated and seamless, to say the least. Your dreams will become a reality if you take assistance from banks that provide the best interest rates and other facilities to customers. 

Besides convenience various banks are focusing on paperless banking and the banking experience of the clients. All the processes to apply for becoming a customer are online and easy. 

The promise of your dream home has many factors which make it a bumpy ride – the spiraling real estate costs, lack of funds for down payment or the fat EMI that may incur. However, here you need to invest a little time in research and compare several banks and find out a true friend who helps to fulfill the home dream. For home loans in India, the home loans by various banks are created to offer the faster acquisition of the desired property. 

Purchasing a home can be a bit stressful. However, if are all prepared it can be a fun and exciting experience. Certainly, finding the right home loan is an important step in your endeavor. Let us have look at some tips that will help you turn your dream into reality.

• Start saving today for a down payment.  If you are ready with a large down payment, your burden will reduce automatically and you are more likely to find the best deal.
• Having a good credit score and credit history lets you get the best deal on your home loan.
• Get your documents ready to accelerate the application process.
• Use home loan calculators to find out how much home loan can you afford.
• Compare all the offers. Check every detail, differences in points, interest rate, fees, charges, etc. to find the best option.

You can be an investor, a first-time buyer or planning for an additional property; you will have an appropriate loan plan here. Banks have attractive rates of interest that suit your particular requirement along with repayment flexibility. You can simply pay the interest during the construction level, which saves your money in the initial stage, isn’t that great?