A Complete Guide to NRI Home Loans
Many NRIs dream of settling in Kerala when they retire from their present jobs overseas. Banks in India provide a wide choice of home loans for NRIs seeking to buy a home in India. Here’s a Complete Guide to NRI Home Loans brought to you by Vishraam Builders, reputed eco-friendly builders in Thrissur.
Home loan eligibilityÂ
A salaried person or self-employed can apply for a home loan either individually or with co-applicants who may or may not be co-owners of the property. All co-owners need to be co-applicants compulsorily.Â
Housing loans can be availed for:Â
Purchase of new homes
Resale homesÂ
Construct a home on an own plotÂ
Purchase a plot
Do home improvement or extension
To refinance your existing home loanÂ
Documents required:
Proof of identity, residence and income
Photocopy of a valid passport and visa
Copy of property allotment letter/buyer agreement or agreement to sell, if property is already shortlisted
Passport size photographs of all applicants
Cheque towards processing fees
Power of Attorney if applicable
Home Loan Process
You can apply for a home loan by submitting a duly filled home loan application form along with the necessary documents to the lender either directly or through a POA holder.
Power of Attorney (POA)
Any of your relatives can be appointed as the Power of Attorney (POA) holder in India. He/She is entitled to act on behalf of you as per the authority provided under the POA agreement. This makes your physical presence not required at all times for processing/facilitating your home loan.
Maximum Loan Amount
Generally, a loan amount between 75% and 90% of the property cost is issued.Â
Tenure
A loan repayment period of up to 20 years is given for a NRI home loan..
Interest Rate
You can opt for an adjustable-rate home loan or a fixed rate home loan. The interest rate is fixed for 2 or 3 years, post which the loan will automatically convert to an adjustable rate, adding up to a total term of 20 years.Â
Repayment of loan
For an under-construction property, you need to pay only the interest till its completion after which you can start your EMIs. You may opt to tranche the loan and start paying the full EMIs if you wish to start repaying your principal too. For a fully constructed property, the EMIs would start immediately. All EMI payments should necessarily happen through your NRE/NRO bank account in India. No penalty is there for prepayment of partial or full value of the outstanding loan amount paid from own sources. However, prepayment charges are there in case you are refinancing it to another financial institution in India.
Tax Deduction
You are eligible for deduction of up to Rs.1.5 lakh on housing loan principal repayment under section 80C and up to Rs. 2 lakhs on interest payments if the home is lying vacant.Â
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