September 30, 2022

Regular mutual funds and direct mutual funds – Two sides of the same coin?

Jul 24, 2021

Investors in mutual funds have the option to invest in two ways. One option is direct mutual funds, where investors can buy funds directly through the website of a mutual fund company or through an aggregator offering direct funds. The other option is regular mutual funds wherein investors buy funds through a broker or an intermediary (distributor). This is one major difference between regular and direct mutual funds.

Deciding upon which option is better suited for your financial goals depends on various factors. We have compiled the basics you need to know about direct and regular mutual funds to help you decide which is the best option for you.

What are direct mutual funds?

Direct mutual funds are directly offered by fund houses or Asset Management Companies (AMC) to the investors. With no third-party involvement, direct mutual funds are exempted from brokerage charges or the commission that a distributor could get from the AMC. This could help you earn higher returns due to the lower expense paid. These funds can be bought through online or offline mode and are easily identified because of the word ‘Direct’ in the fund’s name.

What are regular mutual funds?

Regular mutual funds are bought through an intermediary. The intermediary charges fees to the fund houses for selling their funds. The fund houses then, in turn, pass this charge on to investors in the form of a slightly higher expense ratio. The total expense paid is slightly higher than that of direct mutual funds.

Advantages of regular mutual funds over direct mutual funds

  1. Expert guidance: A qualified professional can help you choose mutual funds schemes while taking into consideration your financial goals and risk appetite. They guide your investment journey to help you earn better returns.
  1. Convenience: Investing in mutual funds requires time-consuming research and might be tedious for many. An intermediary analyses these funds and thus saves the investor’s time and efforts. Also, they provide other value-added services that help investors to stay abreast with the fluctuations in the market.
  2. Constant portfolio monitoring: Markets are dynamic, and this calls for constant monitoring of your investments. Intermediaries that monitor market behaviour are quick on their feet to suggest that you sell or swap funds that are not performing.

Advantages of direct mutual funds over regular mutual funds

  1. Higher returns: Investing in direct plans eliminates brokerage charges. This reduces the total expenses spent on a fund. Thus, you are likely to gain higher returns on your investment.
  2. You’re in charge of your investment: With no intermediary involvement, you are in complete control of your investment.

Direct mutual funds vs regular mutual funds – Which is better?

The choice of direct vs regular mutual funds entirely depends on your investment profile. If you are a beginner or don’t have much knowledge about investment, you could go for regular mutual funds. However, if you’re well-versed with market trends and understand the mutual fund universe, direct plans might be the best option for such experienced investors.

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You may not get your Home Loan approved if you are missing out on these documents!

Jul 23, 2021

Furnishing adequate documents is an indispensable part of the home loan process. It is through your documents that the lender gathers information about you and assesses your eligibility. Also, documentation helps you keep a record of the money borrowed as well as repaid for purchasing your home. However, often people miss out on submitting the required documents. Even if they do furnish the documents, they are incomplete or dated, which leads to rejection of home loan application. Lenders do not approve your home loan application unless you submit accurate and complete documents. Therefore, before applying you must know the documents needed with a home loan application.

If you wish to apply for home loan, ensure that you do not miss out on these documents.

KYC documents

Your KYC documents are crucial for a home loan. It includes your age, address proof and identity proof. There are various documents that you can furnish for KYC compliance. Some of them like driving license, Aadhaar, etc., can be used as an identity as well as address proof.

Income documents

The lenders ask for your income documents to check your creditworthiness and repayment capacity. It helps them assess if you have a stable source of income to repay the loan. Lenders ask for a copy of the bank statement, passbook and salary slip to verify the inflow of income, and income tax returns. In case of self-employed individuals, additional documents to support the application would be needed.

Property documents

There are some property documents without which you might not be able to get the home loan at all. For example –

  • Chain of ownership

The chain of ownership traces the property to its first owner and identifies how the property has been transferred from one owner to another. It helps confirm that the seller has the right to transfer the property and is the legitimate current owner.

  • Property’s approved plan

This is crucial to ensure that the property is legal and has been constructed in compliance with all the laws and rules in force. When you have an approved building plan, it means that no authority can put an objection to it or demolish it. The approved plan also confirms that the property has all the legal permissions and is authorised by civic authorities.

  • Encumbrance certificate

Encumbrance certificate is crucial to ensure that there are no pending dues or mortgages on the property in question. The lenders ask for this document to know all the details of the transactions carried out about the property.

  • Receipts of tax and dues

Lenders also need to ensure that the seller has no pending dues of the society or authorities. They can also ask for an occupancy certificate which would confirm that the municipal authorities have no objection to the sale and the seller has no pending tax dues. These documents also add as an additional proof of the ownership and possession of the property.

All the lenders more or less have the same set of documents required for a home loan. However, depending on their policy, there could be some additional documents that they could ask from you. While all the documents are equally important, it could be challenging to get a home loan approval without these documents. Therefore, before you apply, ensure to arrange these documents required for a home loan.

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Best Places to Look for Private Money Loans

Jul 15, 2021

Private money loans are an excellent investment instrument for anyone looking to invest in real estate but can’t get a traditional loan or don’t want to. Here are some ideas for where to look for an excellent private quick credit money lender:

  • Mortgage Consultants
  • Realtor
  • Attorneys
  • Financial advisors, accountants, and CPA’S
  • Investment Clubs
  • Real Estate Seminars
  • Mortgage Consultants
  • Investment Clubs
  • The internet

Who are Independent Money Lenders, and what do they do?

Private money lenders can range from private individuals to hedge funds, institutional investors, portfolio lenders, real estate brokers, REO (bank-owned property) agents, and even family members or friends. Short-term loans from private money investors come with a higher interest rate and some upfront costs.

The number of points awarded might range from four to ten. Private investors are more interested in the property’s equity than in your credit. You should have no trouble finding a private money lender to assist you if you have a property with equity and a plan in place to repay them. Here are the benefits of commercial money lenders:

It offers a lucrative investment opportunity. 

It may make more sense to seek out a private money investor in tight financial markets like those we see right now. Why should you miss out on a lucrative investment opportunity because you can’t acquire standard financing? A private money loan, often known as a hard money loan, is typically a short-term loan.

 These loans appeal to investors because they need money immediately, so they don’t miss out on a lucrative investment opportunity, such as a pre-foreclosure or real estate foreclosure auction, where time is of the essence and having cash available soon is important.

The Federal Reserve regulates commercial lenders.

Traditional lending institutions have tightened their lending rules in recent years due to the large number of foreclosure losses they have experienced. Commercial banks are governed by the Federal Reserve and are required to follow tight lending laws and regulations. It adds a lot of red tape, delays and makes it harder for people to receive loans or get them fast.

Despite the government’s efforts this year to alleviate the tight credit markets through financial rescues, acquiring a loan is still a source of irritation, and the procedure can take weeks. Unlike commercial transactions, private transactions are not governed by state or federal legislation. As a result, private money lenders can make a decision more quickly. Individual money lenders may have different policies in place, such as assessing credit, verifying references, or validating employment. On the other hand, most private lenders are concerned about how quickly you can repay them and whether or not the home has equity.

Make a list and start looking for financing.

When working with private quick credit money lenders, it’s a good idea to have a list of properties you’re interested in so you can contact your private lender immediately away when you find one. You don’t have to be anxious about financing, and you’ll be able to focus on negotiating your contract.

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