With the rate of interest for home loans reaching the ever lowest post-COVID-19 pandemic along with property pricing depreciating in tier 1 cities, India has become an investments hub in real estate amongst the NRI’s.
NRIs (Non-resident Indians) or PIOs (Person of Indian Origin) are the key segments in the residential property consumers.
Let’s understand who is an NRI (Non-Resident Indian)
One can attain the status of being an NRI by staying overseas for more than 182 days. It has also been stated in the law that a person is a resident if he stays for more than 60 days in India during the year in question and for 365 days during the four years prior to that year.
Many NRIs wants to buy some property in India for their loved ones or for investment purposes. Various regulations guide the application for an NRI. Once as an aspirant you justify all the regulations, you are also required to provide the financial institutions with documents. Please have a look at the list of required documents below –
List of Home Loan Documents Required for NRIs
KYC – Know Your Customer
- PAN Card – All NRIs or PIOs have to provide a copy of the PAN Card for applying for the loan. It is a mandatory requirement for all co-borrowers.
- Copy of Passport – The NRIs or PIOs need to arrange a copy of a valid passport and visa to the financial institutions. It should be not be expiring in recent times of application.
- Copy of Visa – A valid Visa either stamped on a Passport or on paper (for a few countries) needs to be provided to the financial institution.
- Address Proof – Proof of address needs to be provided for the residence customer is residing overseas.
- Valid Work Permit – All Non-Resident Indian’s and PIO’s have to provide a valid work permit of the country they are working in.
- Valid Labour Card / ID Card – Various countries provide Labour card / ID card to the people who are not resident of that country. Hence they are required to provide Labour or ID card as issued.
- Highest Qualification Proof – Highest educational qualification proof is a mandatory document by leading lenders in case of NRIs to understand the growth prospects of the applicant and his income.
- Latest Payslips – All the borrowers should provide three months payslips for the loan evaluation. In the absence of payslips, the salary certificate from the employer can also be availed.
- Bank Account Statement – The borrower needs to provide the latest six months bank statement for the salary account held overseas. Along with the Overseas account, the applicant also needs to provide statements of six months for all the bank account held in India.
- Employment Contract – A copy of the latest employment contract is required. The employment contract also is required to be attested by the employer.
- Previous Employment details – If the current employment is less than two years, an experience letter from previous employers is required.
- Income Tax Documents – Various countries have different tax documents. NRIs who are filing ITR in India have to provide the latest two years income tax return. Enlisting few income tax documents as per the countries.
- Applicants working in the UK should possess form P60.
- Applicants working in the United States are expected to Provide a W2 Certificate.
- Applicants working in Singapore also have to provide an income tax certificate. Singaporeans are also required to provide CPF account transaction for the last six months.
- Existing Obligation details – Applicants should provide the details and statement of account for the existing obligations they have in India and overseas.
- Investment Details – A home loan is evaluated not only on the income of the customer but also.
- Credit Bureau Report – Credit Report is of utmost importance while applying for a loan. Financial Institutions can fetch the CIBIL report as applicable in India. However, the applicant needs to provide a credit report of the overseas country where he is currently residing. Generally, Experian is the credit history provider in most of the countries, you can refer to the list of credit bureau agencies for further details.
Power of Attorney
Power of attorney is a letter of authorisation by which a person gives the right of transacting in matters relating to legal, property, banking, judicial proceedings, tax payments etc to another person on his behalf since he/she is not available on the place for reasons like being overseas or due to old age etc. An attorney can be anyone from family or friends as per the willingness of the customer.
Some NRI applicants even before applying for a home loan tend to have a power of attorney made. However, while applying for a home loan, a new Power of Attorney has to be mandatorily created since the lenders have their own prescribed formats for power of attorney defining the rights for a loan to the holder. The power of attorney has to be notarised. If the applicant is in India during the loan application process and disbursement, he can get it notarised from the court. In case he is abroad, the power of attorney has to be notarized from the Indian Embassy or consulate.
Various documents are required for a home loan like Sale agreement, Encumbrance certificate, property map, allotment letter from Builder, Society NOC, Property Chain, Registration & Stamp duty receipt are required.
Key Points to Note
- In the digital era, at the time of application, if the applicant is not present in India, the financial institution can share a copy of the Application Form which can be printed and sent back to the country duly filled and signed. Post-COVID, Lenders like HDFC Ltd. have introduced an online application process in which the documentation can be done digitally by NRIs.
- If the applicant is not in the country while putting up the applications, financial institutions may ask for a Notarised / attested copy of KYC from the Indian Embassy or consulate.
- Borrowers need to provide the documents in English. In case any document is written in the Local language of the country where the borrower is residing, he needs to provide a translated copy. A translated copy of income documents including the offer letter has to be countersigned by the employer.
- The Evaluation of income is done subject to the income as converted in INR. The conversion rate followed by the financial institutes is a weighted average converted rate derived fortnightly since due to fluctuation of rates, its difficult to evaluate daily conversion rates.
- Holding an NRE / NRO account is mandatory for NRI applicants. The financial institute sets up the ECS/ Enache in NRE / NRO account. It can be opened once the case is sanctioned, if not preowned.