Home loan MODT

I am planning to close my home loan. I read that if there is a lien placed on my loan then I have to get it removed from registrar office at the time of closing. I do not know how to find if there is a lien placed or not. I checked the documents I have and found that there is a document with Memorandum of deposit of title deeds in which I gave rights to the bank over my home.

Please tell me if this Memorandum of deposit of title deeds is a lien?
And should I do anything more other than taking the original copy of this document from the bank at the loan closing time?

Thanks a lot.

Hi,

Memorandum for deposit of title deed or MODT is applicable for all Home Loan borrowers. It is essentially an undertaking given by you that you are depositing the title documents of the property with the bank at your own free will in return for a loan. This is not a lien. Here are the steps you need to follow to close your loan.

Get an NOC from the Bank or HFC: Once all the payments towards your loan are done successfully, request the bank to issue a no objection certificate (NOC). Do not fail to check if the NOC has your name, property address and loan account number mentioned clearly. The NOC should also mention that all dues have been paid and the bank or the HFC has no claim on your property anymore.

Take back the original documents after due diligence: You hand over a certain number of documents to the bank while taking a loan. It is important to take back all original documents once the loan is cleared. Banks generally give a list of documents they have taken from you at the time of loan disbursal. Keep that list handy to counter check if the bank has returned all the submitted documents. Also, make sure that no part of any of your documents is missing. Double check all relevant documentation before you sign an acknowledgment that you have received all original documents from the bank.

Get the lien removed: You will need to approach the registrar office with the NOC from the bank and get the lien removed from your property – just as in the case of a Car Loan.

Request the bank to inform credit information bureaus on successful loan closure: Request your bank in a written format to inform credit information bureaus like CIBIL and Experian, about your successful loan closure. This will reflect an improvement in your Credit Score. You can check your score once the bank informs them to make sure that your Credit Score has changed and improved.

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Cheers,
BB Expert