Things To Consider When Applying For NRI Home Loans
The housing loan application procedure is challenging. You need to follow the conditions set by the lender for getting the loan sanctioned. You must prove your eligibility, income, and relevant documents for processing. If you are a non-resident Indian applying for the loan, the process is smooth, especially if the lender is accessible in the country where you reside. Some aspects to consider include home loan interest rate for NRI and others.
Have a resident Indian co-applicant
The most basic thing to remember is that your loan application as a borrower is considered only when you have a co-applicant for the loan with a resident Indian. They might either be co-applicants or co-borrowers, or co-owners of the property you are buying through the loan. Your application might not get sanctioned without the presence of a resident Indian co-applicant.
Check the eligibility criteria
The NRI home loan eligibility is different from those laid out for the resident Indians. For example, you should be at least 23 years to 25 years old for applying for the loans. You must show stable employment and regular income in the overseas bank account. Generally, the earnings need to be approximately USD 42,000 annually or its equivalent while residing in countries like the USA, Canada, Australia, New Zealand, Europe, or Southeast Asia.
You also get loans if you live in Middle Eastern countries. However, many lenders do not offer loans to NRIs residing in Pakistan, Sri Lanka, Bangladesh, Nepal, Hong Kong, North Korea, etc. So, check the same before applying.
Loan application process
Before submitting your application to a specific lender, compare them online. Since NRIs are always impossible to be physically present in India while applying for loans, lenders should have provisions for online application. Here, you fill the application form thoroughly, attached the scanned documents, and submit.
Flexibility and prepayment
It is better to opt for floating NRI home loan interest rates than fixed rates during application. The fixed rates are usually higher and attract foreclosure charges if you want to switch lenders later. You can also prepay the loan but must calculate if the prepayment is worth it and amount to any actual savings.
Role of the Power of Attorney
Assigning a Power of Attorney is crucial for NRI home loans. Your co-applicant serves as your point of contact and typically should be a family member. NRIs applying for the loan need to visit the Indian Embassy in their country and take the PoA format from the chosen lender. Adhere to the standard PoA format and sign the document favouring the Indian co-applicant and get the Indian Embassy to put their approval seal.
Besides the NRI home loan interest rate in India, consider the other associated charges and apply for the loan accordingly.