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4/13/2019

What Are The Best Home Financing Options For NRI Buyers?

If you’re an NRI and looking for investment options, you will know that owning residential property in India can prove to be a valuable asset and also about staying connected to their roots. Buying a property in India is the best option, considering the several regulations that have made an investment property a must-do in 2017 and the fact that the fall in rupee exchange value tends to work in favor of NRIs. 

 The introduction of Real Estate Development and Regulatory Act has made owning a home hassle-free, but on the other hand, there are still some regulations NRIs have to understand when looking for ways to finance their property purchase. Here are the following home financing options for NRI to invest in Indian real estate

Financing sources For NRI Home Buyers:

When an NRI decides to own a home in India, it is important to understand the several regulations that govern how the property purchase could be financed. The first and the foremost thing to understand is that the money for purchasing a residential property should come through banking channels only. An NRI may also use money in his FCNR (foreign currency non-resident) account or in non-resident external (NRE) rupee account, maintained in India. NRIs can purchase a residential property in India, by obtaining a home loan in Indian currency from financial institutions like banks and housing finance companies. The home loan may also be granted by the current Indian employer of the NRI for the purpose of financing of the property and retirement plans.

Obtaining Home Loan

Investment in Indian real estate by NRI can be only allowed in residential or commercial properties, and banks can finance only such properties. Almost all banks offer home loans to NRIs for buying a residential property or constructing a house in India. They can also get a loan, for the purchase of land (non-agricultural), for the purpose of constructing a house in India.

One can apply for a home loan online, as well as offline. The size of documents that need to be submitted for obtaining a home loan, will rely on whether the NRI is a salaried employee or a sole proprietor. It will also differ, depending on the country where the NRI residesNevertheless, in all cases, it is required to bring copies of one’s passport and visa, passport-sized photographs and substantiation of residence in the foreign county.

In order to obtain the home loan, whether the NRI is salaried or a sole proprietor, s/he has to complete a minimum amount of stay in the country of present residence. Some banks have the mandatory provision for a co-applicant an NRI guarantor.

Banking companies may also refer to an acceptable co-applicant or an NRI guarantor. If an NRI has opted for an NRIGuarantor, it is important to submit documents pertaining to identity proof, address verification proof and income documents of the NRIGuarantor.

Methods To Service The Home Loan

All EMI payments need to necessarily happen through remittances from abroad, through a proper savings channel, or through the NRE/NRO/FCNR account. In case, if the property is Buy-to-Let, an NRI can use the rental income to pay off the EMI. If an NRI is short on cash, money can be transferred to the NRO account from close relatives to pay off the loan. In case the exact property is purchased for self-occupancy, it is possible for the NRI to take a loan against the NRE or FCNR account deposits for the purpose of servicing the home loan. The amount allowed is up to ₹1 crore.

Things To Keep In Mind

For an NRI, financing is one of the critical subjects when it comes to investing in Indian real estate. Whether you are buying or selling residential property in India, it is important to keep all your mandatory documents in hand. Remember, investing in properties through Clicbrics is best, as it will offer you the best options for residential properties in India.

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