A house loan is a bank-backed loan secured by the safety of an underlying asset. A home loan can be used to purchase an unfinished property, a resold property, or even build a house on an empty lot.
The title of the property is returned once the borrower repays the amount. If the borrower fails to repay the loan, the bank can seize and sell the underlying property to recover the principal amount and any unpaid interest.
If you are also planning to apply for a home loan but confused about What Is a Memorandum for Deposit of Title Deed (MODT) In a Home Loan? Then here is your answer, all home loan borrowers must sign a Memorandum for Deposit of Title Deed (MODT). It’s an agreement that you’ll deposit the title documents with a bank of your own free choice in exchange for a loan. If you fail to make timely payments, lenders can demand this agreement to collect debts.
Some banks must register the undertaking, and the government imposes stamp duty on registration fees. Stamp duty fees range from 0.1 percent to 0.2 percent of the total house loan amount.
What is MODT in Home Loan?
The MODT is an unavoidable fee. Because it is a loan charge, the RMW Registration and Title System (ATLAS) imposes it on all home loan borrowers. It’s a form of memorandum of title that has a deadline. In the memorandum, certain banks in the nation levy additional fees. This is a stamp tax levied by the state government on registrations.
If you are planning on taking out a loan soon, make sure you apply for the fee indicated above within a month. MODT handles the consent of the loaner. As a result, the entire process becomes visible.
Everything You Need to Know about MODT in Home Loan
As you know, the answer to What Is a Memorandum for Deposit of Title Deed (MODT) In a Home Loan? Here are all the important things that you should know about filing the MODT,
The current e-filing method and the traditional physical method are available for filing a processing fee for a house loan. You can understand both methods step by step.
Previously, mortgage agreements were kept outside the public sphere, but the Department of Registration and Stamps has launched an online e-filing system available to banks and non-banking financial institutions; people may submit notices online through banks. You can find the procedure on the Department of Registration and Stamps’ website.
The electronic filing of intimation notices in mortgage cases through the deposit of the title deed is effective. It was made to protect the interests of both banks and society and combat fraud. Here are the following steps to follow the while online or E-filling,
- Go to the Department of Registrations and Stamps’ online site.
- Locate all of the electronic files required for a MODT registration.
- The sub-office registrar is where the MODT notification is filed.
- Use the Government Receipt Accounting System to pay the charges to the government.
In case the mortgage is done by way of deposit of title deed, here are the key factors about the filing of notices of intimation,
- Any arrangement between the borrower and the lender that is performed or signed must be registered. The customary registration deadline is four months following the execution.
- If an agreement is not signed, the borrower must file a notification of intimation of that very loan within 30 days of the mortgage’s date.
- The notice of intimation is not necessary when an agreement is completed and registered
- The failure to register the agreement or file the notice of intimation may jeopardize the validity of the mortgage and harm the interests of the parties concerned.
2. Physical Filing
Here are the following steps to follow the while physical filling,
- Bring the MOTD notification to the sub-office.
- Fill the form out and then return it to the sub-office.
- Double-check that the notification includes information about the property owner.
- Expect the file to be accepted by government officials within a few days.
- Only pay stamp duty and other fees to government employees.
- Prepare the notification according to the guidelines.
- Stamp duty must be paid.
- Attach the pictures and the mortgagor’s signature(s) and thumb impression(s) (s)
- verify it by a designated officer at the bank has he will provide his signature and seal
- The mortgagor must send it, together with a copy of the notification, to the sub-registrar.
- If stamp duty is paid on another document under Article 6 and Rs100/- is paid on the notice, the attested genuine copy of the other document must be presented.
- The sub-registrar checks the stamp duty, passes the receipt of the filing fee, and documents handling costs and accepts the hardcopy of the public notice.
Following are the title documents placed at the bank via MODT,
- Encumbrance certificate, Tax paid receipt, Mother deed, Sale deed, Sale Agreement
- Certificate from Khata
- Occupation certificate and other land-related papers such as RTC, layout plan, site plans, etc.
Benefits of MODT in Home Loan
Following are the benefits of MODT,
- Stamp duty and other expenses are as little as 0.1 percent of the loan amount. The cost of registered mortgages is significantly greater.
- After completing the payments, the title deed is quickly obtained.
- When the property is turned over to you, it is unnecessary to register it.
What is Stamp Duty, and How Do You Pay Your Stamp duty?
Stamp duty is an amount levied by the government to register a paper, usually a contract or purchase paper. Stamp duty varies between different types of paper and is not standard between states. Depending on the deal’s details, it is usually a fixed amount or a percentage of the agreed value indicated in the paper.
In the event of physical filing, stamp duty can be paid in any legal way. If you want to pay via demand draft, make it payable to the relevant Sub-Registrar Office. Fees for document processing should be paid in cash. Stamp duty must be paid electronically using the Government Receipt Accounting System in the case of e-filing.
How can you cancel the MODT in Home Loan after the debts have been paid off?
Take a look at the points below to understand how to cancel the MODT.
- A NOC from the bank is required for MODT cancellation. It should include all pertinent loan information. You may only cancel the MODT once the bank has collected the total loan amount if you have a house loan. Furthermore, it has no claim to the loaner’s property.
- To terminate your memorandum, request a ‘Deed of Receipt’ from your lender and cancel the MODT.
- Go to the sub-office registrar and ask for the lien to be removed from the property.
The Documents Required For Cancellation Of The MODT
Following are the documents required for cancellation of the MODT,
- Bank representative Office ID
- Original MODT
- NOC certificate
- Card Aadhaar
- The bank’s authorization letter (if applicable)
- Borrowers’ PAN and Aadhar
- Identification of two witnesses
What does MODT in Home Loan stand for?
MODT stands for memorandum for deposit of title deed. It is a mandatory home loan processing cost that all borrowers must pay. Some states require the MODT charge on a house loan, while others do not.
How can you pay the MODT fees?
MODT fees must be paid by everybody who takes out a house loan. You can pay your MODT fees online using the Department of Registration and Stamps’ online site. There is also a conventional approach that requires you to attend the sub-registrar office.
If the title deeds of various properties are submitted, where should the notice be filed?
If all properties are in the same area, a single notice with all of the properties’ details and title documents are sufficient. If the properties are in different jurisdictions, separate notifications must be submitted to each sub-registrar in charge of that jurisdiction. The filing and document processing expenses for such notices must be paid individually.
What location should the notification be filed?
The notification must be submitted to the sub-registrar office, whose jurisdiction includes the property where the title deeds are deposited.
Can the time limit be extended for filing?
The time restriction cannot be increased since it is a legislative provision rather than an administrative directive. The notice has to be filed within thirty days of the mortgage’s closing date.
Now you should know the answer to What Is a Memorandum for Deposit of Title Deed (MODT) In a Home Loan? And is important since the consent of the loaner is managed by MODT. As a result, the entire process becomes visible.
The legal records state that the property owner voluntarily placed all title documents with the bank. You should also know that all states do not require a MODT. For mortgage loans, the larger state usually imposes these processing costs