A permanent home of our own gives us sense of financial security. But buying a home from your savings is no longer possible. You need to rely on home loans. These loans are provided by banks and housing finance companies. Resident Indians and Non-Residents can apply for this loan. The lender checks if you are eligible for the loan before sanctioning it. If you’re looking to apply for NRI home loans, here’s how you can improve your loan eligibility.
- Ensure your credit scores are good
- Pay off any existing loans you may have
- Pay all your credit card bills on time
- Mention additional income sources and variable pay in the loan application
- Consider applying jointly with another, employed member of your family
1. Ensure your credit scores are good
Whether you are a resident Indian or an NRI, lenders first and foremost check your credit scores, before even considering your loan application. This is why, it is essential to ensure you have decent credit scores. To fit into your lender’s NRI home loan eligibility criteria, you must ensure that your credit scores exceed the minimum 750+ points out of a total of 900 points. High credit scores are a sign of responsible credit repayment behaviour, so you must try to increase the score before applying for the loan.
2. Pay off any existing loans you may have
A good way to improve the credit score is to pay off any existing loans. As an NRI, you may have taken a loan in your country of residence. The lender will check all your existing loans, including those taken abroad. If they are not paid on time, or if you have defaulted on any payments, your application may be rejected. While applying for NRI housing loans, it is best to ensure all outstanding loans are repaid in full.
3. Pay all your credit card bills on time
Credit card debt is also considered a type of loan. To increase your NRI house loan eligibility, you must ensure that you repay your entire credit card debt each month and not just the bare minimum required. If credit card bills are not paid on time and if you’re paying high interest on this debt, the lender may be sceptical about sanctioning your loans.
4. Mention additional income sources and variable pay in the loan application
When you send out your loan application, you are allowed to list all your income sources. These could be income earned from market investments, fixed deposits and even rent from another property owned by you. Also, if your employer provides a bonus or incentive, over and above your net monthly salary, you can list this income as well. This income is regarded as variable pay. The lender considers it as additional income, which can help improve your NRI home loan eligibility.
5. Consider applying jointly with another, employed member of your family
The chances of getting your home loan sanctioned increase, when you can show high net monthly income. If you have a working spouse or another, employed family member (your son, for instance), you can list such individuals as joint account holders. The lender will consider the salaries of both applicants. Also, they can rest assured that if one applicant is unemployed for a certain period, the other will be able to pay the loan EMI. Note that the joint applicant too, has to show good credit scores and must have no outstanding debts while applying for the loan.
NRI housing loans are available for buying properties in India. Your chances of getting the loan approved increase if you can show good savings in your NRE or NRO bank accounts or even FCNR deposits. Additionally, you must mention your intention to assign a Power Of Attorney to improve your loan approval chances.