When you apply for a housing loan, the lender will ask you to submit heaps of documents to ensure the disbursal. Along with all the paperwork, signing MOD is crucial. If you are unaware of its significance in getting a home loan, read the article.
Know the Role of MOD in Home Loans
MOD denotes the Memorandum of Deposit of your property. The borrower provides a guarantee that the title deed will be deposited with the lender until the borrower repays the loan amount in full.
To confirm the ownership, the borrower must deposit all the documents to the lender. In case the borrower of home loans fails to pay back the loan amount, the lender will have the authority to take back the mortgaged property and prevent financial losses.
List of Property Documents Required toQualify forA Home Loan
- Fully filled loan application
- Address proof
- Latest form 16
- PAN card
- Recent passport size photograph
- Last 6months’ bank statement
- Last 3 months’ salary statement
- Sales agreement
- Possession certificate
- Payment receipts
- NOC from builder
- Sale deed
- The latest property tax receipt
In case the applicant isself-employed personnel, he/she has to deposit all the legal papers associated with business, bank account, and financial disclosure. These are some of the basic documents that need to be deposited with your lender to acquire a home loan.
However, it is best to check with your lender through a home loan agent the complete list of documents that you need to submit to get your loan approved most favorably. To have the most seamless home-buying experience, ensure buying property from a reputed builder.
How can the MODBe Canceled?
Once The borrower repays the loan fully, the lender is bound to cancel the Memorandum of Title Deeds and release the property from charge. From the lender’s side, an official will appear in the registration office and draft a release deed to confirm the department about the cancellation of MOD.
While getting the NOC and release deed, it is advisable to check the property address. Also, ensure that the lender nowhere lays claim to the property. Check that it is mentioned that all dues have cleared in full.
How Do Lenders of Home Loans Get Benefits from the MOD?
Keeping the MOD documents with the lender ensures they possess the property in case the borrower defaults on the loan. In such a case, the loaner has full authority to auction off the property to regain the dues. With the MOD deposits, the lender reduces the risk of losing to a minimum.
The MOD housing loan is a far better option than Mortgage loans. While in the registered mortgage, the stamp duty and other rates are quite high, in the case of MOD housing loans, the charges are as low as possible. Once the borrower makes the payment in full, the title deed can be easily recovered.
Additionally, there’s no need for registration when the lender hands over the property back to the depositor. It also eliminates the risks of scams associated with home loans. Therefore, there’s no chance of ruining the home-buying experience.