71% Non-Resident Indians are happy to buy a property in the Indian real estate market according to a Financial Express Survey.
With the Reserve Bank of Indi (RBI) allowing a Non Resident Indian (NRI) to acquire any property in India, except agricultural land – most lending institutions are eager to support and service NRI investors in their quest to buy a property.
Home Financing Options for a NRI Investor
There are multiple borrowing options an NRI can use to buy and invest in a real estate property in India. The five widely known borrowing options for buying a house or plots are as below.
- A loan against an existing property
One of the simplest and easiest ways to avail home financing is to borrow against an existing property. The actual amount disbursed as a loan is completely determined by a combination of the mortgaged property’s value and the NRI’s creditworthiness.
The lending agencies could offer a lower rate of interest to borrowers in such cases as they would have an immovable and real asset in the form of the hypothecated property. Even then, the final rate of interest is entirely subjective to individual applications’ and the credit score of the individual (s).
- Special NRI home loan programs
There are banks and Non Banking Financial Corporation (NBFC) entities who offer home financing for NRIs through special home loan packages and features which are otherwise not available for a domestic Indian borrower.
From longer repayment tenures of up to 30 years, with interest rates as low as 7.05%, a minimum employment period of just 1 year abroad, a home improvement loan which can be repaid over 15 years – lending institutions have special schemes and packages that encourage NRI investors and make it easy for them.
India’s biggest cities now have earmarked localities for luxury housing and upmarket premium properties which cater to the NRI community’s needs. For example – there’s an integrated township for NRIs in Chennai which offers indulgent residential properties to provide for such needs.
- Loan against NRI deposits
For investors who have term deposits with banks, it is an extremely simple and effortless process to apply for a home loan. While banks offer upto 7.6% interest per annum on some fixed deposits, a home loan borrowing comes at a cheaper rate of interest at times.
The collateral of a term deposit decreases the risk of lending for financial institutions, it paves the way for quick processing and disbursals. It also lessens hassles and paperwork for the NRI borrower.
- Home construction loans to develop an NRI Owned Plot
Land is a scarce resource. Developing a piece of land and making it a home for oneself is a dream for most individuals including NRIs.
While there are loans available against immovable properties like a warehouse, a workshop, a factory etc. – an empty piece of land owned by a NRI can also be mortgaged to obtain home financing. What’s more, it could also help in getting some very favourable terms if the plot’s title deeds and documentation are clear.
A plot in places like a sports township for NRIs, other places like an integrated township for NRIs in Chennai generally have clear documentation which helps the borrower.
Having said so, the final terms and conditions of the loan application including rate of interest is solely dependent on the combination of the plot’s price value and the NRI applicant’s credit score.
- Any regular home loan either as a sole applicant or with a joint applicant
While there are special home loans which NRI investors looking for home financing could apply for, they can also opt for a regular home loan from lending institutions with a domestic joint applicant (or a sole applicant too), if they want to apply for a loan with more than 1 applicant.
A home loan with two applicants get more heft than a sole applicant proposal. A domestic applicant would not be able to participate as a co-applicant in a NRI special home loan scheme. This is when a regular home loan becomes a viable alternative.
The Five “Whys” A NRI Investor Should Buy a House In India
- Higher Purchasing Power (The dollar to INR conversion rate)
- Booming Market (An always high demand for housing)
- Property Value Appreciation (Steady growth of the market resulting in higher resale value)
- NRI Friendly Investment Regulations (A simple hassle free process)
- Luxury Housing On The Rise (Housing solutions with modern, tech driven amenities and security)
Oragadam – The Destination for NRI Buyers and Investors
A planned township, an integrated transport system, a robust commercial center, a strong industrial presence, easily available healthcare and high quality education- Oragadam offers all of this and much more!
Oragadam offers everything – from premium plots for NRIs in Chennai for those who want independent houses and villas, to flats and condominiums for those who wish to reside in gated communities and apartments.
Flats in Oragadam are constructed with the highest standards of safety, security coupled with premium amenities.
When one compares 3 bhk flats for sale in Chennai and then the going price of flats in Oragadam with a plethora of options ranging from semi furnished houses, fully furnished flats, high security communities and other amenities – it is an easy choice to make.