What are title deed charges when applying for a home loan?
What you are referring to as title deed charges are actually memorandum of deposit of title deed charges. They are more commonly known as MODT charges and applicable for home loans. MODT is an undertaking given by the borrower stating that he is depositing the title documents of the property with the bank. The undertaking needs to be registered and the government levies a stamp duty towards registration charges. The stamp duty charges vary from one state to the other but on an average the charges of 0.1 to 0.2% of the home loan amount are applicable.
Memorandum of Deposit of Title Deed (MOST) is an undertaking by you as the borrower and will state that you have deposited the title documents of the property with the bank at your will, in order to get a loan from the bank. You will need to register this document. So, stamp duty charges will apply and these are often known as title deed charges. These charges will vary from one state to another but is normally between 0.1% and 0.2% of Home Loan amount. Lenders might not inform you about these charges. So, it is best for you to ask about these before you go for the Home Loan. Read this blog post for more information on stamp duty and registration charges - Stamp Duty And Registration Charges At The Time Of Property Purchase.
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