Ms. Sukanya Kumar, RetailLending.com
Let’s clear the air
around some of the common misconceptions about home loans for Non-resident Indians (NRIs)
There are a number of
Indians who have settled abroad for better career opportunities.
For them, a property
back home usually gives a sense of attachment and security, which is a prime
reason for investment in real estate here by NRIs.
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| Ms. Sukanya Kumar, RetailLending.com. |
But, there are many
misconceptions associated with borrowing in India for this purpose. Let’s
address the more common misconceptions you might have.
Power of Attorney
only to blood relatives..!
Though certain banks
such as ICICI Bank or / Axis Bank insist that power of attorney should only be
given to blood relatives in India, there are lenders like HDFC and Standard
Chartered Bank where this is not a policy.
In other words, NRIs
can give the general power to any person whom they trust, including friends and
associates.
Also, there are
certain banks like HSBC & Citibank that have developed mechanisms where the
NRI does not need to give the Power of Attorney to a resident of India in order
to take a loan, making it more convenient.
Of course, they have
other requirements, including a blood relative as a local co-applicant for the
loan.
No joint loans with
resident Indians..
An NRI and a resident
Indian can jointly apply for a loan, but this would be still be considered an
NRI loan.
Even if the asset is
jointly owned, the NRI would be regarded as the principal applicant and his
income would be primarily considered while determining loan eligibility.
The EMI payments will
also be made by the NRI, which he could either do through his non-resident
external (NRE) account or by opening a non-resident ordinary (NRO) account
jointly with the resident Indian and then issuing cheques or standing
instructions from that account.
Shorter tenures and
lower interest..
Loan tenure and the
rate of interest for resident Indians & NRIs are the same. In case of a
change in status from NRI to resident, the loan is reworked according to the
revised income; the relevant interest applicable is charged and the tenure is
also revised.
NRIs from Middle East
can not get a loan..
Just like other countries, NRIs from the
Middle East can avail a home loan to purchase property in India. But they need
to submit an extra document and that is a copy of their work permit.
The card needs to be translated into English
by Government-authorised translators.
Visiting at least
once while the loan is being processed..
To avail a home loan in India, it is not
necessary for NRIs to visit the country at any stage.
One just needs to
have all documents in place, including passport copies, a valid visa, a work
permit, contract of employment, work experience certificate, etc., and submit
self-attested copies of the same to banks.
OCI can not apply for
a housing loan..
Overseas Citizens of
India (OCI) are individuals who have dual citizenship, i.e., they hold a foreign
passport but have an OCI card, which also makes them a citizen of India.
The housing loan
norms for them are similar to what is applicable to NRIs.
The only difference
for OCI holders is that they need not pay taxes in India and are not eligible
to vote.
PIOs can not buy
property in India..
Foreign nationals or
individuals with foreign passports can avail home loans to buy property in
India too, but only if they are of Indian origin.
All they need to do is to
present their PIO (Person of Indian origin) card along with other requisite documents.
While the norms have
been eased for NRIs, the only important aspect that they need to keep in mind
is that when they are investing in a property in India, they should approach a
bank that has a presence in their country.
The city where the
property is purchased should also have a branch of the bank.
About the author..
The writer Sukanya
Kumar is the
founder & director of RetailLending.com,
a home loan advisory
firm
Retaillending.com Contact Details
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