Applying for a home loan in India and applying for the same in abroad. What’s the difference?
The Home Loan procedure followed around the world varies depending on the population and financial conditions of an economy. India being a developing country with huge population has a great potential for house financing companies. If we consider rich and developed countries like United States of America, Japan and Britain, these countries follow a trend where majority of middle class residents prefer living in rented house rather than purchasing it.
According to Indian traditional values, roof is considered as the most essential thing for a man. We want to build our own house, and we despise the idea of living in a rented house. House is also considering as a temple, where we can find solace and peace with our family, which makes home loans so popular in the country. Unlike foreigner we don’t mind spending millions on ahome; they would rather stay at a rented house. Most people there die paying mortgages of these houses, as they spend all their income enjoying their lives.
Procedural Difference and Affects
- Time And Verification
There is no doubt about the fact that home loan has become one of the most popular banking service in India as well as other countries around the world. However getting a home loan in a different country can be a complete challenge, as it will take double the time and effort, as first the bank outside the country will verify all your information in the foreign country, and then again validate everything with officials in India. Getting a home loan from a different current can take over a month to completely sanction.
- Boundary Restriction
Different Banks offer different policies and offers, based on the preference and taste of the people living in that country, to lure them in their banks.This can be a major challenge while applying for a loan, as chances are that you desired policies features won’t be available in every bank.
For example, countries prone to tornados usually build house from woods, and insure these houses, banks at such places offer a completely different policy graph if you compare it with home loans plans offered by the same international banks.
- Mortgages, Penalties and Interest Rate
Most banks in India follow a lenient procedure for taking over mortgages and applying penalties, compared to banks abroad. Banks abroad also demand a relatively high interest rate compared to our domestic home loan plans. Banks being over professional outside India, instantly add penalty even if you are 1 minute at depositing your home loan EMI’s.
- Maximum Home Loan Limit
An Indian citizen can apply for almost 85% amount of the property value as loan in India, whereas banks abroad hardly offer 70% maximum limit of the total property value in the loan amount to an applicant with an average salary of 30,000 to 80,000.
Policies for Indians to Invest In Properties Abroad
Owning a property abroad can involve a lot of restrictions as well as paper work for Indians. FEMA (Foreign Exchange Management Act) restricts Indians from investing in immovable property anywhere outside India, without informing RBI (Reserve Bank of India) and completing the documentation process, mentioned under this act.
This can confuse NRI (Non Resident Indians), as to where they should apply for loan, in their parents’ home country or the place they are living in. According to our domestic banks Indians can only acquire immovable property outside India, in the form of gift, inheritance or it might also be purchased by after a lot of consideration by the government.
It is obviously a lot easier if you apply for home loans in Indiaas being an Indian resident you won’t have to face any hassle. You will require the basic documents, like your Aadhaar Card, PAN Card and other bank details in order to apply for home loan.
Documents Required For Applying For Home Loan in India
- Completed loan application
- 3 Passport size photographs
- Proof of identify (Voters ID card/ Passport/ Aadhaar Card /Drivinglicense/ IT PAN card)
- Proof of residence (Copy of Telephone Bills/Electricity Bill/Property tax receipt/ Passport/ Voters ID card)
- Proof of business address for non-salaried individuals
Statement of Bank Account/ Pass Book record of last 6 months
- Signature identification from present bankers
Personal Assets & Liabilities statement
Documents Required For Applying For Home Loan outside India
- The applicants will be demanded to submit all of the documents mentioned in the above list, with a copy of their citizenship prove.
- Income Source: Employment certificate and other salary slips of last year
- Visa Verification: The bank will ensure that you have been living in the country long enough to invest in a house in their country.
- Assets and liabilities of the applicant in the home country.
- Existing Loans in the applicants home country.