Buying your dream home can often mean taking out a substantial home loan. A term that often crops up during this conversation is the MOD. The MOD or the Memorandum of Deposit is what is known as the Mortgage deed to your property. So, what exactly does this document do, and how does it impact your purchase of flats in Chennai, is what we cover in this short but insightful article.

The MOD is executed at the time of the release of money from the lender to the developer or seller. It is usually drawn by the lender and signed by both the lender and the borrower of the loan, which is you. It can be executed when the money starts flowing in instalments to the seller, or during the time of registration of the property, depending on the home loan terms. The MOD explicitly states that the bank or lending institution is entitled to a share of the property, like flats in Chennai, until the point where the loan is completely paid off. This is a security feature that they employ in case the borrower defaults on the loan payments. 

There has been a recent change in real estate regulations. This has prompted all banks and lending institutions to execute the MOD when the final instalment of the loan is released to the seller. Although the MOD is drawn and executed by the bank, the charges for the same are borne by the borrower. It can be anywhere between 0.1% and 0.5% of the total loan amount. But the slab is set at Rs.25,000, irrespective of the total value of the loan and regardless of the type of flats in Chennai

The MOD becomes an essential piece of legal documentation that validates the ownership of the lender. It also explicitly states that a loan has been taken by the borrower on the property. The document also reflects on all the encumbrance certificates. 

When the borrower has paid off the last instalment on the loan, at the end of the loan tenure, the bank has to render the MOD null and void. It completely transfers the ownership of the property to the rightful people, the buyers. This is done by sending a representative from the bank to the registration office and drawing a release deed. This is to notify the Registration department to release the MOD and clear any and all encumbrances. Your investment is now wholly yours to enjoy for the rest of your lives. 

Lifestyle Housing develops luxury properties like 4BHK apartments in Chennai and 3 BHK flats for sale in Chennai. Our experts guide you to the best financing options for you. Partnered with reputed national banks, we speed up the home loan process so your dream home becomes yours at the earliest possible. Our website offers great resources on all things real estate, so consumers can make educated choices. 


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