Home Loans
NRIs can avail financing assistance in the form of housing loans, for purchasing residential properties in India. These loans are available through leading financial institutions like HDFC, LIC, Canfin Homes, Citibank, ANZ Grindlays, Vysya Bank, SBI, Corpbank and ICICI.
Some of the features of these loans are:
- The applicant must be an Indian passport holder.
- Loan amounts are available up to Rs 1 crore (or 85%) of the cost of the property, whichever is lesser. Processing and administrative charges extra.
- Loan eligibility is decided by the repayment capacity of the individual. Repayment capacity takes into consideration income, age, qualification, number of dependents, other income, amounts and a few other items.
- Between 5 and 10 years, rates of interest vary from 7.75% to 9%.
- Repayment period ranges from 5 to 20 years or on superannuation or on completing 60 years of age.
- The loan is repaid in the form of Equated Monthly Installments (EMIs).
- The security for the loan would be the equitable mortgage of the property financed. This is created by the deposit of the original title deeds of the property with the HFI.
- Local guarantors will also be required in the case of a few institutions.
- Copies of the following documents have to be submitted along with the application for the loan to the institution.
- Latest salary slip
- Latest work permit
- Visa stamped on the passport
- Power of Attorney to a local individual
- Receipt of payments made for purchase of the property
- Agreement of Sale
- Interest rates and EMIs are subject to change without notice. Check with the financial institutions for prevailing interest rates.
- A salaried applicant should be abroad for at least a year, and a self-employed applicant for 3 years.
Reserve Bank of India (RBI) Guidelines on NRI Investment in properties in India
I. PERMISSION FOR PURCHASE OF RESIDENTIAL PROPERTY / COMMERCIAL PROPERTY.
- NRIs holding Indian passports—No permission required
- NRIs holding foreign passports—Intimation to RBI via form
- IPI - 7 within 90 days of purchase of property or final payment of consideration.
- Funds through NRE/NRO accounts.
Property held by NRIs in India can be sold. No permission is required from the Reserve Bank of India.
III. REPATRIATION OF SALE PROCEEDS
- Repatriation of proceeds from sale of residential property purchased on or after 26th May 1993 is allowed.
- The RBI will consider repatriation of the consideration amount remitted in foreign exchange for the acquisition of 2 properties. The sale has to have taken place after 3 years from the date of final purchase deed or from the date of final payment.
- Application of repatriation (IPI-8) has to be done within 90 days of the sale of the property.
- NRIs can let out immovable property in India. The rental income from the investment has to be credited to the NRO account.
- Subject to changes from time to time
- E. & O.E.
1. RENTAL RETURNS
The rental returns on an investment in
- Residential property in Bangalore is 5%-6% p.a.
- Commercial property in Bangalore are normally in the range of 12%-15% p.a. on the invested amount.
2. APPRECIATION OF PROPERTY
Conservative estimate of appreciation on an investment in property in Bangalore is about 20% p.a. NRIs start to gain by investing in Real Estate when compared to the investments on the NRNR / FCNR deposits.