4 Common Mistakes to avoid while taking an NRI Housing Loan

Applying for an NRI housing loan is a good idea when you want to buy your dream property or meet your financial requirements. However, it is not as simple as it seems, especially when you are an NRI as it requires different steps to be followed and many precautions to be taken.

Here we have listed down

Some common mistakes to avoid while taking an NRI housing loan

Mistake 1. Finalising the lender first and the property later

Most of the times when people are deciding to apply for a home loan, they focus on determining their eligibility first to avail the loan. While that is not a wrong thing to do, but it is not necessary to finalize the lender just to get the loan eligibility amount. Here is an easy way for that:

If you are below the age of 40 years and are earning a good income with minimum financial liabilities, you just need to multiply your yearly gross income by four and that gives the amount you are eligible to get.

However, most of the banks provide loan for ready-to-move-in and under-construction properties with approved builders, However, there are certain conditions which may cause a problem in future;

For Instance, if the property is unapproved, unauthorised or is facing any legal issues with the property, your application may be rejected. Therefore, it is suggested to select the property first keeping in mind its legality and authorisation and then apply for a loan. And accordingly, choose an appropriate lender that gives you attractive interest rates on NRI Housing Loan.

Mistake 2. Not ready with the down payment

Mostly, people assume that they will pay the down payment proportionately for their property and the bank will pay the rest. All lenders without an exception ask for the savings details before lending the loan to check the eligibility. Hence, keeping the funds ready for a down payment is a must.

Mistake 3. Not choosing floating rates

NRI Housing loans can be availed at fixed or floating rates of interest. A true fixed rate of interest (TFR) remains unchanged or fixed for the entire duration of the loan. However, floating rates of interest change if the RBI announces the same.

So whenever, you are taking a loan for a longer duration like 20 years or more you should opt for a floating rate of interest. Always prefer a bank Like SBM Bank that deals with the base rate to offer a transparent process than other banks.

Mistake 4. Life Insurance policy is a Must

Buying a life insurance policy and health insurance is preferable while applying for the NRI housing loan if you want your family to be financially secure in case of any medical emergencies.

SBM Bank offers NRI housing loans at affordable rates of interest for people who want to buy their dream home. You just have to click and apply on SBM Banks website and contact the customer care in case of any queries.