Key points about Home finance options for NRIs

October 19,2016

Having a home in their own country is something every NRI wishes for. Due to this reason, the government of India allows NRIs to purchase and own a property in India. This property can either be residential or commercial. But since the buyer is an NRI there are several rules and regulations which s/he has to follow.

Here we are going to tell you about the finance options for NRIs when it comes to buying a home.

The source of the money – The money which will be used to buy the property, it is essential that it comes through banking channels only. You also have to keep in mind that the payment cannot be tendered in the form of a cheque or foreign currency. An NRI has an option of using his money which is credit, non-resident external (NRE) rupee or non-resident ordinary (NRO) or foreign currency non-resident (FCNR) account which is being maintained in India.[/vc_column_text][vc_single_image image=”23467″ img_size=”500*500″ alignment=”center” style=”vc_box_border”][vc_column_text]Obtaining a home loan – When an NRI invests in India, he/she is allowed only to invest it in residential and commercial properties. Likewise, the banks too can only finance these properties. One can also get a loan for the purchase of non – agricultural land for the purpose of constructing the house. As far as the documents are concerned, it depends on a number of factors such as whether the borrower is salaried or self-employed. It will also depend on the country of residence. Irrespective of this, copies of passport, visa, passport – sized photographs and proof of residence in the foreign country will be required.

The NRI will also have to stay for a minimum period of time, in the country of the present address to get a home loan.Servicing the home loan – As far as the servicing of the NRI home loan is concerned, loans can be paid remittances from outside India. This has to be done through a proper banking channel. You can also debit the NRE or NRO or FCNR account. If the property is a let – out, the rental yields can also be used for servicing the NRI home loan.Remittances out of India – An NRI can repatriate some of the funds if the property has been sold. However, the number of properties for which she/he can remit is limited to two (whether purchased or inherited). Under normal circumstances, the NRI can remit $1 million per year, out of India. This can be done out of his NRE, NRO or FCNR account. This amount will also include the amount which has been remitted from the sale of his house.