Home Loan Package

By: EconomyWatch Content   Date: 17 December 2009

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In India, a home loan package can be taken from Housing Finance Companies (HFCs), banks and financial institutions. Depending upon the interest rates in India, various housing finance companies and banks offer different home loan products. Some of the prominent home loans in India are:

  • Home purchase loan
  • Home construction loan
  • Home extension loan
  • Existing home improvement loan
  • Land purchase loan

 

The range of home loans in India spans from Rs 5 lakhs to Rs 1 crore. The amount a homebuyer is entitled to is decided on the basis of the property’s cost, the buyer’s credit history and the capacity to repay the loan. Homebuyers can get a loan of a maximum of 85% of the property’s cost. They can also take 75% of the cost of land, if they are purchasing land.

The bank calculates the repayment capacity of homebuyers in the basis of:

  • Age
  • Income/Salary
  • Qualifications
  • Credit History
  • Dependant/(s)
  • Assets/Liabilities
  • Income of co-applicant/(s)
  • Stability in employment or business

Home Loan Package: Home loan for Non-Resident Indians

The Foreign Exchange Regulatory Act of 1973 provides recognition to Non-Resident Indians (NRIs). NRIs who qualify for NRI housing loans can be divided into the following categories broadly:

 

  • Citizens of India staying abroad for work or vacation for an indefinite period
  • Government servants deputed abroad to work on Indian missions and drawing salaries out of government resources
  • Government servants posted abroad to work with foreign governments or international agencies, such as the World Health Organization (WHO) and International Monetary Fund (IMF).
  • State Government and Public Sector Undertaking officials working on temporary assignments abroad.

 

According to the provisions of the Income Tax Act, NRIs are required to meet certain criteria. For instance, 182 days is the minimum period for an NRI to have stayed in India to be eligible for a home loan package.

 

There is a wide range of lucrative NRI housing schemes offered by banks with favorable repayment options for NRIs. NRIs looking for housing options in India have the support of the FDI policy, according to which they are allowed 100% FDI through the automatic route.


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