Indians living on foreign lands always can use a house of their own in their country. Hence, NRI loans are now helping all those Indians to have this dream fulfilled in many wonderful ways and with lots of other benefits.

The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulatory Act, 1973. Every bank and housing finance companies follow the RBI guidelines to define NRI -
"An Indian citizen who holds a valid documents like Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI."

Eligibility Criteria:-

• Non-resident Indians planning to return home
• Government servants stationed overseas on duty with the Indian missions or deputed abroad by foreign Governments or international agencies
• Loans are also granted for renovation of an existing property.

Loan Amount
Housing finance companies can cover up to 85% of the cost of the residential property, with an upper limit of Rs.1 crore & Minimum loan amount Rs. 3 lakhs. The capacity to repay determines the maximum that an NRI can borrow, which in turn is determined by such factors as: income, age, qualifications, work experience, number of dependants, income of spouse, assets, liabilities, stability and continuity of occupation, employment prospects in India, and savings history.

As per a circular issued by the RBI on 31st January, 2007, if the loan is against the NRI's NRE and FCNR accounts, the maximum loan amount cannot exceed Rs. 20 lakhs.

Rate of Interest and other charges

• Interest rates are same as applicable for resident Indian borrowers for various tenures, available on fixed/floating/combination of fixed and floating rates (under SBI-Flexi Home Loans)
• Repayment in EMIs (Equated Monthly Installments)
• Interest is applied on daily diminishing balance basis

A NRI has options of fixed rate and floating rate interest home loans. In a fixed rate scheme the rate of interest associated with the loan is fixed, i.e., a borrower cannot take advantage of a reduction in interest rates in future. And, if they wish to change over to the floating rate scheme, they will be levied some extra charges. Time Span of Loan
Generally loans are disbursed for a period of 3 to 10 years, and NRIs can avail of time spans to suit their convenience.

Guarantee for the loan

The residential property that is being purchased is mortgaged to the financing institution, by submitting title deeds and other collateral security as may be required:

• Original title deeds tracing the title of the property for a minimum period of the last 13 years.
• Encumbrance Certificate for the last 13 years.
• Agreement of sale /construction, if any.

Source:- Mindsprings