For those who want to purchase land or house, a home loan is typically one of the most convenient options. And perhaps, it’s your only option, unless you have a ton of money waiting for you in a savings account. Compared to your home country, you might earn more money as an NRI, but given today’s economy, the chances of you not requiring a home loan is very thin.
Does an NRI need a special permit to buy a home in India?
An NRI does not need any special permission to buy properties in India, but you do need to know that while some vendors will recognize common foreign currencies, not all of them do. Rupees and standard banking networks would have to be used to make a transaction. In this regard, you should conduct thorough research in advance about NRI Home loan schemes available in India.
Some technicalities you should know
A prospective buyer would have to hold their funds in an NRI (non-resident) account, as per the FEMA and RBI rules. Here are a few things that you must remember before applying for a home loan in India as an NRI:
You have to settle the purchase in rupees, and the loan money must be deposited directly into the account of the borrower, not the account of the NRIs.
A home loan for NRI in India will usually provide only 80 percent of the property value. The customer himself would have to carry the remainder of the deposit.
Since NRIs live outside of India, they can choose to grant an Indian friend or relative the power of attorney.
When you’re in this circumstance, depending on how many rights you want your representative to exercise in your absence, you can go for a general power of attorney or a particular one.
Keep in mind that you will have to stick to a few laws if you want to purchase property in India.
Considering that the tax benefits are relatively the same for NRIs and locals, a property can be a great tax-saving tool. You just need to know how the rules should be followed.
Also, you will need to submit the proper documents required for NRI home loan.
Make sure you are aware of the nature of the property before purchasing it. You may want to review the legal documents first prior to making the purchase.
Make sure the original title deed bears the name of the seller from whom you are acquiring it. This will prevent the property or pitfalls from any future lawsuits.
Keep things arranged
You may want to obtain the advice of an attorney before signing any papers. Ensure that all your rights are known to you.
Having all that said, you must be able to buy the property immediately, as long as you carry all the documents required for NRI home loan. Each lender will have its requirements, but you will need to carry evidence of your identification, address, and income in general.
You can consult with an NRI Home loan expert at your nearest PNB Housing office before applying for one.