The procedures for availing a home loan for an NRI aren’t the same as compared to what you would need to follow as an Indian citizen. Take a look at some crucial pointers you should know before applying for a home loan.
Are You Eligible?
You must be an employed applicant who is at least 18 years old with a regular income. Some banks may also require you to be employed for at least 2 years unless you have six months’ experience as a government employee abroad. Your income can be calculated including the income of your co-borrower or guarantor, but lenders may have a higher minimum income requirement for you as compared to Indian residents. Depending on the lender, you will also need to hold an NRE or NRO account with your preferred lender and have a minimum income of their pre-determined rate.
How To Prove Your Eligibility
You can submit these documents to prove you are eligible.
- A copy of your passport, VISA or work permit
- A listed POA, as you will be out of the country
- Utility bills
- Identity card issued by the government of the country you reside in
- Bank account statements
- Salary slips of the most recent 3 months
- A copy of your bank account displaying your address abroad
- Contract of employment
- Copy of last year’s tax returns with your signature
Things To Keep In Mind
While you can use rental income from the property to pay your loan, remember that you will need local currency to make repayments. You will also need to pay additional charges such as due diligence charges, valuation report charges, property insurance premium and others. Also, keep in mind that lenders may offer you a shorter tenor, which can increase your EMIs. Additionally, lenders may charge you a slightly higher interest. You should also keep the tax implications in mind. You will get deductions on the interest and principal paid along with stamp duty and registration charges. However, keep in mind any tenant will need to deduct 30% TDS while paying you rent and submit the same to authorities.