MODT Charges in Chennai: A Complete Guide for Homebuyers

If you are planning to buy a home in Chennai, you have probably heard the term “MODT charges” during the loan process. But what exactly does it mean? How does it impact your purchase? In this guide, we will break it down for you in simple terms, so you can make informed decisions.

What are MODT charges?

MODT stands for Memorandum of Deposit of Title Deed. It is a legal document that your bank or lender asks you to sign when you take out a home loan. This document serves as proof that you have submitted the original property papers to the lender. MODT is crucial because it protects the lender’s rights over your property until the loan is fully repaid.

When you take a home loan, your lender needs to ensure that it has a claim over your property if you default. So, they require this document to be registered with the registrar’s office. The registration of the MODT involves a fee, which we commonly refer to as MODT charges.

Why is MODT required?

The MODT document is important for both the lender and the borrower. Here is why:

• Protects the lender: It gives the lender legal protection and makes it easier for them to claim the property if there is a default on the loan.
• Secures your loan: Without MODT, the lender may refuse to disburse your home loan. It is a mandatory process that you cannot skip.
• Clarifies ownership: MODT confirms that the property is under the lender’s lien and cannot be sold or transferred until the home loan is cleared.

MODT charges in Chennai: What are they?

MODT charges in Chennai can vary based on the value of your property. In Tamil Nadu, MODT charges consist of a stamp duty of 0.5% on the loan amount, capped at Rs. 30,000, along with a registration fee of 1% on the loan amount, with a maximum limit of Rs. 6,000.

Are MODT charges refundable?

No, MODT charges are not refundable. Once paid, you will not get this amount back, even if you decide not to proceed with the home loan. This is because the fee goes towards the registration process at the registrar’s office, which is a non-refundable government fee.

What happens after you pay the MODT charges?

Once you pay the MODT charges, your lender will register the MODT document with the registrar’s office. This process ensures that the lender has legal possession of your property documents. After registration, the lender will send you a copy of the registered MODT document.

With this, your home loan process can continue, and the lender will disburse the loan amount. Keep a copy of the MODT document safe, as it is an important record that will be needed when you want to close your home loan or transfer it to another lender.

MODT and home loan closure

When you repay your home loan fully, the lender will return your original property documents, and the MODT will be cancelled. The cancellation process involves a small fee, usually ranging between Rs. 1,000 to Rs. 2,000, depending on your property location in Chennai.

Ensure you collect a NOC (No Objection Certificate) from the lender after your loan is repaid. This document states that there are no outstanding dues and the MODT has been successfully cancelled.

Why MODT charges matter for homebuyers in Chennai

MODT charges are a necessary part of the home loan process in Chennai. While it may seem like an additional expense, it provides you and the lender legal protection throughout the loan tenure. Knowing these charges in advance helps you plan your finances better.

Let us say you are planning to buy a flat in Chennai and your home loan amount is Rs. 70 lakh. A 0.3% MODT charge would amount to Rs. 21,000. Being aware of this cost helps you budget better and avoid any last-minute financial stress.

Managing your home loan better

When it comes to home loans, it is important to have a clear picture of all associated costs, including MODT charges. By factoring in MODT charges along with other fees like processing fees, stamp duty, and registration costs, you can plan your loan amount effectively.

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