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What Is MODT? What Is The Process Of MODT?

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If you plan to take a home loan soon, you probably have already heard about the MODT charges. However, if you are a novice loaner, you obviously have an idea about it. You can get the information here.

MODT stands for Memorandum for deposit of title deed. This is a mandatory charge for all home loan borrowers. It acts as an undertaking from the loners’ side to deposit the title documents to a specific lender. Generally, you need to give this charge to the State Government along with a copy of a loan agreement.

For now, you can take a look at other salient facts related to MODT. Moreover, you can go through the process of MODT in detail.

Facts About MODT

As you already know that all home loaners need to give the MODT charges. There are some facts about it that you also need to ponder. Even if you think, “what is memorandum title?” it can give you the answer.

The MODT is a non-negotiable charge. As it is a loan fee, the ATLAS (RMW Registration and Title System) enforces it on every home loan borrower. It is a type of memorandum of title with a specific due date. Every home loan borrower has to give Memorandum and other home loan processing fees to get a final loan sanction. If you are taking a loan anytime soon, make sure to apply for the charge described above within a month of mortgaging the house.

Moreover, MODT undertakes the aspect of the loaner’s consent. As a result, the process turns completely transparent. The legal documents contain a note that the property owner has deposited all title documents to the bank of their free will. Moreover, the bank has given them a loan amount.

Furthermore, some banks of the country charge extra amounts on Memorandum. You can consider it as an add-on to the loan processing fee. This is a stamp duty that the State Government levies against the registration. For your knowledge, the charges of the stamp duty range between 0.1% to 0.2% depending on the total loan amount.

Finally, you should also know that no MODT is mandatory in all states. Generally, the bigger state charges these processing fees for mortgage loans.

MODT Filing Procedure

MODT Filing Procedure

Now, as you know all the vital facts, it is time to go through the filing procedure. Well, there are two ways to file a processing fee for home loan. Firstly, the modern e-filing procedure, and secondly, the traditional method. Here, you can go through both the procedures stepwise. Have a look:

1. Offline Method

The steps of MODT filing in the traditional way are as follows. Nevertheless, you must remember that is a temporary method that the government has started for the convenience of the loaners.

Step1: Visit the sub-registrars office and bring the MOTD notice.

Step2: Fill it and drop it again at the sub-registrar’s office.

Step3: Make sure the notice contains the details about the property owner.

Step4: Expect the government personnel to accept the file within a few working days.

Step5: Pay the charges like stamp duty to the government personnel only.

2. Online Method (Also Known As E-Filing Method)

Nowadays, most home loan borrowers choose the MODT e-filing method due to its convenience. It can save time for the loaners and restrict them from moving about much with vital property and bank documents. Check the stepwise procedure here:

Step1: Visit the online portal of the Department of Registration and Stamps

Step2: Search for all the e-files that are necessary for a MODT application

Step3: The place of filing the MODT notice remains the same, that is, the sub-registrars office.

Step4: Pay the charges to the government with the help of the Government Receipt Accounting System (GRAS)

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Benefits Of MODT

Benefits Of MODT

If you are a home loan borrower or might turn into one soon, you need to know the benefits of the Memorandum charges. The points are given below:

  • MODT allows the loaners to secure the title deed after they make payments.
  • The amount of Stamp Duty is always low compared to the loan amount.
  • With the presence of MODT, you would need no registration during the property handover.

MODT: Cancellation Process

Now that you know about a couple of MODT application processes, it is time to go through the cancellation process. First, have a look at the following points.

Step1: Cancellation of MODT demands a NOC from the bank’s end. It should contain all the details about the loan. It includes the loan account number, address of the property, and, all identification details of the loaner. If you have a home loan, you can only cancel the MODT if the NOC states that the bank has recovered the entire loan amount. Moreover, it does not have any claim on the loaner’s property.

Step2: To cancel your Memorandum, you need to tell your lender for a ‘Deed of Receipt’ and cancel the MODT.

Step3: Visit the sub-registrars office and request him to remove the lien from the property.

Frequently Asked Questions (FAQs)

Q1. What Is MODT?
The full form of MODT is Memorandum for Deposite Title Deed. It is a home loan processing fee that all loaners have to give mandatorily.
Q2. Is MODT Mandatory?
The MODT charge on a home loan is mandatory in some states, not present in others.
Q3. How Do I Pay My MODT Charges?
You can pay your  MODT charges via the Department of Registration and Stamps online portal’s online portal. Moreover, there is a traditional process too in which you need to visit the sub-registrar office.
Q4. Who Has To Pay MODT Charges?
Any person taking a home loan has to pay the MODT charges.

Final Take Away

If you are about to take a home loan, do your homework extensively. Remember that the loan process on any non-movable property is tricky. Moreover,  there are several home loan processing fees in India.

When it comes to MODT, you can easily fund it by taking the online approach. However, download all receipts and keep them safe as the loan tenure continues. This is the way you can avoid a scam. Yet, you need to keep in mind taking legal support while dealing with a bank.

This can keep you away from all types of legal harassment. So, the only thing you would need to do is timely pay the EMIs. The tenure of the home loans is generally long so you need to be very patient. Nevertheless, with proper money management, you can avoid all drawbacks.

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