June 9th, 2008 
Tushar Mathur
Buying a house or property in India is relatively simple for an NRI /PIO. Any Indian who has been living abroad for employment, conducting business or pursuing a vocation is eligible for a NRI Housing loan! Personnel deputed abroad on short term or long term assignments with foreign governments or international agencies are also eligible for these loans.
Housing loans are offered to NRIs by leading financial institutions and commercial banks in India like Citibank, ABN AMRO, and SBI, to name just a few.
As an NRI you can opt for the government supported ‘Griha Shobha’ scheme as well. Remember that an NRI can avail of a loan of up to Rs.1 crore or an amount of up to 85% of the cost of the property. The rate of interest varies from 11.25% to 14.25% per annum (rates subject to change). Almost all banks and financial institutions charge a processing fee, which is payable once and will amount to approximately 1% to 2% of the loan amount applied for.
The eligibility of the amount of loan disbursed will depend upon the individual’s repayment capacity. The calculation of repayment capacity is made based on factors such as monthly and annual income, source of income, savings and credit history, work experience, age, qualifications, number of dependents, other sources of income including spouse’s income, and assets and liabilities. Further, the probability of the individual continuing in the same occupation or his /her interest in alternate employment prospects when he/she comes back to India is assessed.
The typical duration for repayment of the loan is three to ten years. The repayments are usually made in Equated Monthly Installments (EMIs), which are a combination of the principal and interest amounts. EMIs get deducted from the month following the month in which the loan gets disbursed and can be made through post-dated checks from the NRE/NRNR account held by the NRI in India. The list of documents needed to process this application is a long one.
Property and related documents:
* All receipts for payments made by individual towards purchasing the house
* Copies of approved drawings of the property, including extensions
* Copies of Agreement for Sale and sale deed
* Document containing detailed cost estimates from the architect/engineer for the house
* Allotment letter issued by the association of apartment owners
Employment and related documents:
* Copy of the work permit
* Copies of the Visa stamped on the passport
* Copy of the existing/current employment contract
* Latest wage slip/ salary certificate or statement
* Copy of the Identity card issued by current employers
* Overseas bank account statement (four months)
* Copy of the Continuous Discharge Certificate (if applicable)
Have you applied for a Home Loan in India yet? Have you encountered any problems or has it been a breeze? Share your experiences with other NRIs through this forum.
Image Source: Courtesy of http://www.ingvysyabank.com
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