Property in India has always offered best returns on investments made by non-resident Indians (NRIs) and persons of Indian origin (PIOs). The Indian Government permits NRIs to buy or sell property in India.
The property acquisition or transfer by NRIs should be in accordance with the guidelines laid down by the Foreign Exchange Management Act (FEMA). NRIs should always purchase a property through a registered sale or conveyance deed. Laws also permit that they can buy a property on a power of attorney. In the second condition, an agreement to sell and a power of attorney are transferred by the seller in the name of the buyer.
PERMISSION FROM RBI NOT REQUIRED
As per the current legislative system, NRIs do not need to seek permission of the Reserve Bank of India (RBI) to buy any residential or commercial property in the country. RBI has stated in its ruling that foreign citizens of Indian origin, whether resident in India or abroad, have a general permission to buy property in the country for their bona fide residential purposes. The bank has also regulated the payment options which can either be made through inward remittances in foreign exchange through normal banking channels or out of funds in a NRE or FCNR account maintained with a bank in the country.
DECLARATION COMPULSORY
NRIs who purchase any residential property in India as per the general permission are bound to file a declaration with the central office of the RBI at Mumbai. This declaration should be made within 90 days from the date of purchase of the property or final payment of amount. It should consist of a certified copy of the document as a proof of the transaction and a bank certificate concerning the money disbursed.
SALE ALLOWED
The RBI has also stated that the property bought by NRIs can be sold without its permission. Although in case of a NRI, the amount raised from the purchase should either be remitted to India or paid out of the balance in a NRE or FCNR account.
Join atOnePlace as a Agent. Be an associate and increase your business
Latest Residential Deals on Indian Property
Free Legal Advice for Indian Real Estate
Archive for Finance
Handling home loan interest rate hikes effortlessly
Recently many financial institutions have raised their benchmark prime lending rates (PLRs). The PLR is normally a reference or benchmark interest rate that is used by the financial institutions for lending loans. The Reserve Bank of India’s decision to raise the key rates affected many banks as they felt the heat of increased cost of funds. To uphold their profitability, the banks transferred this load to the borrowers seeking home loan.
For borrowers who are tight on the budget will surely be affected by the hiked interest rates. But the market analysts opine that instead of losing the nerve, the borrower should understand and learn to handle his financial standing and debts more proficiently.
BE EQUIPPED
Borrowers who have opted for a floating interest rate should expect fluctuations in rate of interest. Some financial institutions even do not intimate the borrowers about the hike. Nor do they alert their clients of any approaching rate increase. Save some amount up your sleeve every month which could be used if in case the lender unexpectedly decides to increase the EMIs.
BUY AT INITIAL STAGE
Purchasing a house at initial stage ensures that the buyer will become debt free very soon. Also, paying off the home loan early in life helps to boost other investments sooner.
BORROW AS PER THE REQUIREMENT
Bigger loan amounts take a longer duration of time to be cleared and can turn out to be more challenging. Home loan borrowers who are not able to pay off the EMIs on time might turn into a defaulter and can even lose their dream home.
STAY AWAY FROM MORE LOANS
If you are not able to pay back the home loan installments on time then you should try to find out a better repayment option with the financial institution. Taking more personal loans and credit card purchases will only turn the conditions difficult. Stay away from unnecessary expenditure.
FIND ALTERNATE SOURCES
A loan against security, a gold loan or borrowing money against any property can be an alternate source to generate the much-required funds. You should not bring your emergency or contingency fund to a halt. Find alternate sources or assets that you can sell and prepay your home loan amount as much as possible.
Join atOnePlace as a Agent. Be an associate and increase your business
Latest Residential Deals on Indian Property
Free Legal Advice for Indian Real Estate
Qualified Norms For Home Loan
To apply for a home loan is not a Herculean task as it is made out to be.
As the individual are eager to get their loan approved so are the banks looking disburse the home loans to increase their own cash Flow. Most of the banks whether national or multinational are now disbursing the loan to home seekers in India. But before disbursing the loan the banks want to minimize their risk of default of their loan which in any business is a normal practice to mitigate its risk. So there are certain checks and balances that banks normally do . A bank or financial institution has their own criterions and norms to decide the eligibility and amount of home loan. A housing loan receiver would not face any complications by being alert of these factors.
Verification
The home loan application form offers details about the borrower. The details that are offered by the applicant in the application form are cross-checked by various primary and secondary sources i.e., through interview, calling up the employer, verifying from the bank’s database etc. Do make sure that the informations are not fudged as it will hamper the chances of loan approval.
Repayment ability
The loan eligibility is based on the repayment ability on the financial status of the applicant. The income level, net income, liabilities etc are the factors that ascertain the quantum of home loan a borrower is eligible for. The prerequisites comprise of a particular minimum income or a fixed source of income. The credit history of the applicant also plays a vital role. Normally, the financial institutions keep a complete record of the borrower and check the credit history to ensure prior repayment defaults, even from other financial institutions.
Personal Information
These factors comprise of educational qualifications, profession, number of dependents, assets owned, liabilities owed, savings history etc. Higher the education of an applicant increases the points of an applicant. If an applicant has a higher number of dependants or existing liabilities that means lower repayment ability in the terminology of the banks..
Age
Age plays an important role in deciding the earnings capability of a home loan applicant. If a property is co-owned then the co-owner cannot be a minor. Also, the co-owner of a property cannot be above a specific age limit. The age restrains are fixed to reduce ownership rows. The age limit also have an effect on the duration of the home loan and EMIs.
The applicant’s retirement age is also taken into consideration. Generally the loans are given for a tenure of 20 years so once the applicants cross the age of 40 the tenure of loan terms is also reduced because in India the retirement age is taken as 60 years by most banks.
Property Location
Location of the property also has influence on the eligibility of home loan. There are few regions that are specified as being “negative” in the books of some financial institutions. Where the banks will not give loans. Lenders have fixed laws with respect to a minimum area of the house. This area may be built-up area or carpet area of the house. In case, the applicant is buying existing properties, then banks will also take into account the age of the property. Financial institutions sanction home loans on resale properties only if their property age is less than 50 years old.
Financial institutions carry out legal and technical appraisals of the property to check whether the property title is clear or not, there are no ownership disputes, the property is free from any encumbrances etc These titles should be clear to be eligible for the bank loan.
The above points are not at all difficult to meet provided one chooses a right property and has got right papers to support his loan applications. Thousands in India are taking loan and thousands will continue to do so in future also.
All the best for your home loan approval!
Join atOnePlace as a Agent. Be an associate and increase your business
Latest Residential Deals on Indian Property
Free Legal Advice for Indian Real Estate
A Basic Checklist For Safe Property Buying and Investment Planning
1. First, check property’s title related issues. Be careful of development structure where title cannot be secured, either individually or collectively to a society, once possession of the premises is delivered. Please note that a sale under a power of Attorney is legally questionable.
2. Make sure that the property’s construction complies with applicable laws by asking for certificates such as completion, occupancy and NOC from right authorities. Also check for any disputes or litigation.
3. Check for access and entrance points to the premises, existence of real estate management entity, maintain and security, adequate electrical load, back up electricity supply, right to install equipment on terrace.
4. If the investment is in a unit (office/shop, and not the entire commercial space),unit holder should procure equal right against other owners of the premise, ensure payment of rent with minimum involvement from other owners, ensure provision exists whereby termination of lease is with unanimous consent of all unit holder, have ability to sell/mortgage the unit.
5. Check and pay appropriate stamp duty and register the sale deed with in 4 months of execution.
6. If you need help, choose someone reliable and expert. Always verify claims made by builders or dealers and take second or third opinions before taking a decision. Never take anything for granted as property dealings involve huge capital investments.
Small real estate agents can close more transactions by offering best services in investment consultancy, insurance, real estate settlement and escrow services. You may be specializing in commercial real estate, or residential. Look around your city or locality, you can execute highly sophisticated transactions operating outside the bureaucratic constraints of a large company. Big competitors really cannot move at our speed.
Property business in India is drowned in paper work, and you have to make a commitment as a firm, much like builders and developers. Listening is the key to doing business, and finding common ground is incredibly important. Many people ask here if they should get into real estate brokerage and the simple answer is “We don’t know” – only because we don’t know if they can work as hard as the successful ones do.
Remember, most owners and buyers like to work with experienced and trust-worthy agents to enhance their chances of successfully negotiating a home purchase or sale. Your reputation can be a critical factor in getting deals regularly. Unfortunately, there are some real estate agents whose wrongful activities make the entire community suffer.
This is what a property owner has commented about property agents – “I will never use a real estate agent to sell or buy property. I have in every case been either ripped off or not told the full truth about a property that I was interested in. And as far as I’m concerned, if their lips are moving, they’re lying.”
Another angry home buyer has this to say – “In my opinion the property agents are a bunch of crooks, they manipulate the price of the houses to keep themselves in jobs and drive expensive cars. They are the people who sell houses to foreigners/NRIs and jack up the prices. They keep encouraging people to sell and resell their houses to raise the house prices.”
Getting a reputation of high integrity and ethical conduct will serve agencies well. Exhibiting any practices that are not highly ethical will most likely cause owners, builders, other dealers or brokers to hesitate or refuse to do business with you. It’s impossible to serve the client properly if the broker on the other side of the transaction is suspicious of you.
Get more information about the propertie in India at http://www.atoneplace.com
You can view the properties online on the First Realty TV — http://www.atoneplace.tv
Is this the right time to buy Indian Real Estate?
One question which I get asked quite often is the one this topic is about – Is this the right time to buy Indian Real Estate?
I guess the question has its own merit. Indian Real Estate has been and actually is going through a correction phase. Its not really as if the bubble bursted or the markets crashed, but more of a filtering of wheat (real buyers) from the chaff (speculators) thats been going on.
Not that I am any financial expert on the subject but from what I see and hear, Real Estate generally worldwide has a cyclical nature and Indian Real Estate is no different. It is currently going through a dip to prepare for its next high tide. Real estate as a product is fairly limited and there’s pentup demand of Real Estate – both in Residential as well as in Commerical sectors.
Having that said, the followup question is “So, how much of it has already been through?“.
Although India does not has national indexes to support my argument, but I see about 5-10% correction in different parts of the country already happened. Will that continue, probably. Is that happening across the board? Yes and No.
Yes- because the market took a turn from speculators to home buyers, from sellers to buyers and from unhealthy towards regaining health. This is really good for the industry. This was much needed and awaited. This resulted into a correction all over the country, some areas more significantly affected than the others.
No- because the effect hasn’t been on every property that is a part of the Indian real estate. Location, Location, Location are the three core factirs determining the demand as a result the price of any property. Due to limited nature of the product, certain areas, properties have a higher demand than others. So those “in-demand” areas or properties haven’t been affected much, or I can safely state – They are still appreciating North.
Finally the million dollar question asked is – “Is this a good time to buy?”
Now thats where I totally fail to help.
If you have any faith in Buffet investment principles (those who follow him) – join when the tide’s low i.e. YES this is a graet time to find good deals.
Generally/practically – I see most people not being able to gather the courage to invest at a time when markets go through correction. There’s a general dilemma of “what if the market goes further down?” and so the thought continues.
I wish only if someone knew the guaranteed answer to the question!
Gunjan Garg
http://www.atoneplace.com
P.S: feel free to chime in. I’d love to hear your thoughts on this topic. Thanks in advance -GG
Blog at One Place 