Home Loan - Registered Mortgage

#1
Normally the home loan we take from banks is called Equitable Mortgage. There is another kind of loan called as a Registered Mortgage. This is done typically when the home papers aren't fully available (but still good enough to do a transaction). In this case, bank only agrees to a Registered Mortgage. Among other things you need to pay an additional stamp duty to the Govt as part of the loan to register the Mortgage.

I am trying to find more info about this, but info is scarce.

I want to know these things

- Is the extra charges a percentage of the deed value or is it a percentage of the loan value?
- Other than the extra charges, is this any other way different from the loan taker's perspective - i.e. in terms of tax deductions in income tax etc?

Or any other difference?
 
#2
Registered Mortgage

So I got to know some info about this.

Registered Mortgage is also called as British Mortgage. It's the actual type of mortgage as compared to the Equitable Mortgage which is done normally.

In a Registered Mortgage, after registering your property, you also need to register your mortgage with the registrar before the loan gets disbursed. So you end up paying an additional registration fee (Rs. 30000 in Bombay) and also 0.5% of your loan amount as stamp duty (for a 50 Lakh loan, 25,000 stamp duty).

So why would you do it? You wouldn't expect when the bank refuses to give a loan with it. Typically done when some of the papers for the home you are buying are lost or missing - for eg. the seller doesn't have transfer papers of when he bought the house from the earlier owner etc. So the bank makes you do a title search (sometimes even makes you place a 15 day add in the newspapers) and the do a registered mortgage. I think it's easier for the bank to get the money back from you in case of a default if it's a registered mortgage - so it makes it safer for them to do a loan for you on a house with missing papers.

From tax point of view etc, it makes no difference to the buyer.
 
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