What kind of properties can NRI’s buy using home loans?

The Government of India has opened the doors to Non Resident Indians for property investment. And this is an ideal time to invest in a stable property market like chennai. As a Non Resident Indian looking to invest in property in cities like chennai you have three choices: use your own funds; or apply for a home loan; or a combination of own funds and a partial loan. Non Resident Indians considering a loan to buy property must know that banks will sanction loans for the following properties only:

• ·      To buy a built house/apartment
• ·      To buy an apartment/house under construction
• ·      To buy a second hand house/apartment
• ·      To construct a house on approved land
• ·      To buy an approved plot
• ·      To renovate an existing property in India

The basis on which loans are sanctioned is similar to that of resident Indians. The general factors looked into are: qualifications, present job, previous work experience, chances of staying broad for the loan tenure, ability to repay the loan should the Non Resident Indian return to Indian during the loan tenure.

The loan term period varies from bank to bank depending on the individual’s profile. Non Resident Indians are eligible to apply for loans form housing finance companies as well. In such cases he loan period is 5 to 7 years generally.

Interest will have to be paid once the loan is disbursed. If only a partial amount is disbursed then simple interest in that amount alone is levied. The loan must be paid through NRE/NRO or FCNR accounts only. Please note there are no tax benefits to NRI’s unless the NRI has been filing returns in India.

Documents required for home loans include passport copy, employment proof copy, recent salary statements, bank statements, any returns filed in the country residing, etc.  And in some cases in the absence of the Non Resident Indian a power of attorney is required to complete the formalities.

There may be slight differences from bank to bank, however the overall prevailing conditions on buying a property in the cities like chennai using a home loan remain the same.