Difference between Registered Mortgage and Deposit of Title Deed(NOI: Notice of Intimation)
This Mortgage is as per the Transfer of Property Act Section 58(b).
Registered Mortgage is required to be registered with sub-registrar.
A Registered Mortgage is registering the document creating the charge on the property by the mortgagor in factor of lender, with sub-registrar.
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Registered mortgage will entail stamp duty based on the amount lent or amount for which charge has been created.
In a Registered Mortgage, the borrower has to create a charge on the property with the Sub-Registrar through a formal, written process as a proof of transfer of interest to the lender as security for the loan. It meets all the necessary legal requirements to create mortgage or a charge. If the borrower repays the loan according to the terms & conditions of the home loan agreement, the title of the property is given back to the borrower.
In Registered Mortgages, a borrower must approach the sub registrar’s office and the cost of registration is 1% of the home value and 0.5 % stamp the loan value. It is expensive but if the banks insist, this is the only way.
Register Mortgage is high cost as compared with Deposit of Title Deed.
Deposit of Title Deed
This Mortgage is as per the Transfer of Property Act Section 58(f).
Deposit of Title Deedis not required to be registered with sub-registrar.
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Deposit of Title Deed is creating a charge on the property by handing over the title deeds of the property by its owner to the lender and orally confirming of handing over the title needs for the intent to create a charge on the property for the amount borrowed.
Deposit of Title Deed will not incur any stamp duty.
In Deposit of Title Deed, the owner has to transfer his title deed to the lender, creating a charge on the property. The owner verbally confirms the intent of creating a charge on the property. No legal procedure is involved in an EM, but it is considered in the interest of justice (under equity).
Deposit of Title Deedis not registered. This means a borrower must buy a stamp paper and fill the deposit of title on the MODT. The value of MODT (Memorandum of Deposit of Title Deed) is 0.1% or 0.2% of the home value and comes with a price.
Deposit of Title Deed is low cost as compared with Registered Mortgage.
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