The full form of MOD is a Memorandum of Deposit. When applying for house loans, the word MoD is utilized. It is signed by both the customer (the borrower of the house loan) and the bank, who is the executor of the agreement. When a borrower receives their final payment into their loan account for a house loan, the MoD is often completed. This essential fee is added on top of processing fees. Charges for MoD range from 0.1% to 0.5%.
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Significance of MoD in a Home Loan?
By clearly stating that the borrower has taken out the loan against the collateralized asset, a MoD confirms that the lender is the legitimate owner of the subject property. The documentation also includes a list of all certificates of obligation. When the borrower has fully repaid the loan, the lender is required to revoke or invalidate the MoD, which changes the title and makes the buyer the sole owner of the property.
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Advantages of MoD in Home Loan
Here are some of the advantages of MoD while taking Home Loans:
- It eliminates the chance of fraud throughout the home finance process.
- Stamp duty and other related fees might equal as little as 0.1% of the loan amount overall.
- The owner is not required to go through any sort of registration process because the lender delivers the property to the rightful owner after debt settlement.