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Trading

XTRgate – A Detailed Review

The world of cryptocurrencies might be new but within a short space of a decade and a half, the growth of cryptocurrencies has been very impressive to say the least. Many players have come with their own cryptocurrencies and there also have been growth of enablers, agents or brokers as one would like to call them. In this article, we will try and learn something more about XTRgate.

What Services Do They Offer?

XTRgate is a popular platform that has been developed for trading of various reputed and well-known cryptocurrencies and this includes Bitcoin amongst others. There are many such brokerage houses today that offer high quality services to cryptocurrency traders across the world. The name of XTRgate also comes into this field and there are a few reasons as to why they are different from others. Traders who have made use of the services of this brokerage house have a few good things to say about them. Let us try and have a look at the various services being offered by them.

Trading Platform

Any cryptocurrency brokerage house is evaluated after looking at various factors. The kind of trading platform that they offer is an important attribute when you wish to evaluate them. Those who have used XTRgate have found out that they have a high quality web-based trading platform. The platform is proprietary based. They have been able to equip themselves with some of the best cutting edge tools and they also offer features that again are comparable to the best. Traders and end-users can access this platform on any device as long as it has a web browser. Access to the website is also quite easy and it happens almost instantaneously.

Easy To Navigate

The website is also user-friendly and navigation from one page to another can be done quite easily. It also allows the traders to complete their buying and selling without any trouble. The platform has been designed with quite a bit of thought and keeping the end users’ convenience and comfort in mind. It is a perfect combination of modernism with simplicity and therefore most users believe that it is easy and intuitive to use. It also comes with many inbuilt tools and features. These are useful, both the experienced and new traders and they can trade without too much of hassle.

 

A Wide Range of Cryptocurrencies

As mentioned earlier in the article, XTRgate has earned its reputation for being a successful facilitator and broker for Bitcoin and other major cryptocurrencies. Hence, you will be able to trade some of the most popular pairs of cryptocurrencies. These include Ethereum, Ripples, Monero, Litecoin, IOTA and of course Bitcoin. The list of the cryptocurrencies are being added and updated regularly and it is quite obvious that many more cryptocurrencies will be available to the traders within a reasonably short period of time. This is because the broker is committed to offer the widest possible choices as far as cryptocurrency-pairs are concerned.

Spreads & Leverage

There is no doubt that spreads and leverages are critical because they impact the profits and also have a bearing on the ability of the traders to trade. XTRgate has been able to stand out quite effectively in this area. The leverage would depend on the cryptocurrency pairs being used. While some pairs come with a leverage of 1:2, there are others that offer 1:5 and a few more offers up to 1:20. The average spreads range from 0.1 o 0.2 pips and it covers almost all cryptocurrency pairs. This is quite good because it gives the traders to earn big money if they know how to trade well. They have zero commission policy and this also is competitive as far as the traders are concerned

Types of Accounts

The basic account is the most common and popular type of account and it can be opened with an initial pay-in of $250. They also offer Bronze account for $10,000 and Silver Account for $25,000. They also two more premium class of accounts and they are Gold and Platinum accounts with account pay-in amount being $50,000 and $250,000. So the customers can choose the account depending on their ability to deposit and based on the strength of their pockets.

Final Thoughts

XTRgate also offers the best of customer services and other such supports. In addition they have a huge variety of online assets such as a Crunchbase and a Linkedin Page. Hence, when we take into account the various factors and look at them from a holistic point of view, there is no doubt that they are quite good when compared to most cryptocurrency brokers in the market today.

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Finance

ULIPs: A holistic risk management tool

According to Investopedia, risk management in finance is the “process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions.” The average person usually associates risks with death, disability and critical illness. Though these risks have obvious financial repercussions, we seldom give much thought to the financial risks arising out of financial indiscipline and market volatility.

As our investment plans are influenced by our outlook towards life, we don’t give much importance to risk management either. As Warren Buffet says, “risks come from not knowing what you’re doing,” and the risks are pretty high if you have a gambler’s approach towards investing. Not utilizing risk management to mitigate the uncertainty of your investment decisions is akin to gambling, a risky activity.

Financial risk management is gaining more and more importance due to the uncertainty and volatility in financial markets that we are witnessing worldwide. As an investor you have a potent and holistic risk management tool in the form of unit-linked insurance plans (ULIPs). The amazing thing about ULIPs is that it covers all the risks – death, disability, critical illness, market volatility and financial indiscipline – quite effectively. Let’s understand how ULIPs can be utilized as a holistic risk management tool.

What are ULIPs?

Before we dig deeper, let us first get a simple understanding of ULIPs. In a unit-linked insurance plan or ULIP, as the name suggests, every unit (called the NAV) held by the investor is linked to an underlying market-linked product such as equity or debt funds.

When an investor pays the premium for a ULIP, a portion of the money goes to providing life insurance cover for the investor and the remaining amount is invested in various debt and equity funds according to the investor’s preference. As the value of the underlying fund grows, it is reflected by an increase in the net asset value (NAV). Therefore, ULIP investment plans provide the dual benefit of life insurance protection and wealth generation to the insured.

Bajaj Allianz Future Gain is a unit-linked endowment insurance plan that assures maximum premium allocation for better returns; comes with choice of 2 investment strategies; and offers unlimited free switching of funds.

How are ULIPs a holistic risk management tool?

Managing life risks

A unit-linked insurance plan, while managing life risks by providing life insurance coverage, can also protect your income in case of critical illnesses or permanent disability. All you have to do is add a rider by paying a little extra. In that way, it gives you comprehensive life cover while helping you build your corpus in the long-term.

Encourages financial discipline

As ULIPs come with a specific lock-in period, it encourages financial discipline by rewarding you with good dividends for not using the funds indiscriminately. It also inculcates a habit of regular saving as you keep aside a certain amount to pay for the ULIP premium.

Freedom to mitigate investment risks

ULIP investment plans give you the freedom to switch funds to mitigate risks during volatile and uncertain market conditions. You can reduce your equity exposure and lean more towards debt and balanced funds to manage risks and tide over market volatility.

Some insurance companies charge you extra for switching of ULIP funds. However, Bajaj Allianz Future Gain available on Finserv MARKETS acts as a cost-effective risk management tool by allowing you Unlimited Free switching of funds.

Reduces tax liability

We seldom see tax as a financial risk but as Benjamin Franklin puts it, “In this world nothing can be said to be certain, except death and taxes.” Tax can be assumed as a risk because it significantly impacts your savings. A sudden change in taxation rules can have an adverse impact on your corpus.

ULIPs is a very effective tax savings tool as it is an EEE (Exempt, Exempt, Exempt) category investment instrument. You can enjoy ULIP tax benefits in three ways: First, the premium amount that you pay is tax deductible. Secondly, the increase in value of your funds or NAV is tax exempt. And finally, the maturity benefit or withdrawal amount is free from income tax. Thus, ULIPs help lighten your tax burden considerably.

A unit linked insurance plan is a life insurance, investment and risk management tool rolled into one. With a well-planned method of growth, accumulation and withdrawal, ULIPs offer you the opportunity to grow your wealth by leveraging the power of market-linked instruments. At the same time it empowers you to be proactive and mitigate risks by reducing exposure to equities.

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Finance

How ULIPs help you balance asset allocation

Akansha was nothing short of a culinary legend in her neighbourhood. No matter what the cuisine, she always knew how to mix the ingredients in just the perfect amount to get the right taste. “It’s all about understanding that ingredients are as important as the proportion to get the desired result,” Akansha would tell others who would throng her for recipes.

What Akansha had to say about the importance of ingredients and their proportion in a dish to maximise taste, also holds true for many other aspects of life including your investment portfolio.

Most of us are risk-averse and normally put our money where we find ourselves at minimum risk like bank FDs. However, an investment portfolio that’s dominated by a single asset class cannot deliver the same result as that of a well-balanced investment mix. That’s where ULIPs come into the picture.

Unit-Linked Insurance Plan (ULIP) is an innovative hybrid product that offers dual benefits of insurance as well as investment. In this case, the premium paid is divided into two parts—one to offer life coverage and the other goes towards investment in money market instruments. Now, to get the best results from your investments, you need to create an assortment of asset classes rather than going for a single one. Like Akansha said, in order to get a perfect recipe made of all sorts of market-linked instruments like equity, debt and gold, you need to make the asset allocation responsibly.

Now, what does asset allocation mean in simple terms? In case of ULIPs, asset allocation refers to the proportion of each asset in your portfolio that is influenced by your risk appetite, long-term financial goals and several other factors.

Therefore, this implies that those investors that have a bigger risk appetite and want to hold on to their equity investment for a long time are likely to get more attractive returns.

For such risk savvy investors, investing in ULIPs can be a great investment idea to maximize their returns. Moreover, like other life insurance policies, you can enjoy ULIP tax benefits of up to Rs. 1.5 lakhs on the premium paid under Section 80C of the Income Tax Act.  It is important to note here that right now ULIP plans are the only equity-linked investment plans that are tax-free. ULIPs are an innovative product in the sense that they promptly eliminate the hassles associated with middlemen from the entire trading process. Today, you have the option to choose from seamless and instantaneous online ULIP investment plans such as Bajaj Allianz Future Gain, which are offered with no allocation charges.

If you want to maximize your returns on your investment, but are running short of time or confidence, ULIP helps you balance your asset allocation for the best results with the help of experienced fund managers. ULIPs also offer the added advantage of allowing fund switching which can help manoeuvre through market volatility and mitigate risks during adverse market conditions. ULIPs Plan acts as a cost-effective risk management tool as it allows you unlimited free switching of funds unlike other insurance providers that are likely to charge you for this facility.

With fund switching, you can make your asset allocations based on the market conditions along with your own long-term financial goals and risk appetite.  You can review your portfolio and reallocate your assets as you wish without worrying about additional charges. Keen investors benefit from having a hands-on approach by getting policy statements on a regular basis. With this, you can easily keep track of your investments. With products like Bajaj Allianz ULIP Plans, available on Finserv MARKETS, you have access to assets that offer varying levels of risk and returns, customizable to suit your needs.

ULIPs have gained an impressive popularity among investors who want to monitor their corpus closely and track the growth over time. Now, an increasing number of young professionals are becoming financially literate, thus looking for instruments that can help them maximize their profits. Offering dual benefits to its investors, ULIPs have emerged as one of the most highly preferred avenues for investment.

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Business

Cannabis Shares Tumble on Weak Earnings

 

Cannabis stocks have been hammered recently as it appears that most are reporting that weaker than expected demand has eroded revenue and earnings.  By mid-November, the Alternative Harvest ETF (NYSE:MJ) was down by 11.3% for the month, as traders continue the process of readjusting the stock prices of many of the Canadian public cannabis companies.

Demand Has Yet to Immerge

Demand has yet to immerge in Canada in the wake of legalization of recreational marijuana nationally in 2018. Ahead of this event, suppliers boosted production and now oversupply is weighing on prices. This has forced write-downs of inventories, as stockpiles grow to untenable levels. It will take a while for growers to pair back their production, due to lack of demand, but until this occurs, a shake out will continue to occur in the cannabis space.

Earnings Disappoints

All eyes were focus on Canopy Growth’s financial results to see how one of the larger players performed during the latest quarter. Canopy reported a loss of C$374.6 million, which is equivalent to $282.4 million or C$1.08 a share, in the quarter, which was a great than the C$330.6 million loss, or C$1.52 a share, posted in the year-earlier period. Sales rose to C$76.6 million from C$23.3 million. Expectations were for the company to lose 41 cents a share and revenue of C$100 million. Canopy’s revenue of C$76.6 million was lower than the C$90.5 million generated in the first quarter.

Cronos Also Misses

The loss experienced at Canopy was the straw that broke the camel’s back. The decline the entire sector, could continue to perpetuate until the market feels that prices reflect future demand for recreational marijuana. Other company mimic the poor performance from Canopy.

Cronos Group reported a quarterly loss of $0.02 per share versus expectations of $0.03. This compares to loss of $0.03 per share a year ago. Cronos shares have lost about 22.2% since the beginning of the year. Cronos group posted sales of $10.10 million for the quarter, missing expectations by 3.5%. This compares to year-ago revenues of $2.88 million.

Aurora Cannabis also missed on the bottom line. The company reported a loss of C$39.7 million, wider than the C$20.8 million expected. Sales came in at C$75.2 million, which was also a miss coming in below forecast of C$90.6 million. Sales into the Canadian recreational market dropped 33% to C$30 million. Aurora plans to cut capital cost by immediately suspending the building of a new facility. New retail facilities will also be reduced.

The overall outlook for the sector is weak, as supply dwarfs demand. Full legalization in the United States, could help reduce the supply glut. This is likely a long way off which puts the Canadian cannabis industry in a period where there will likely be consolidation. Companies that do not have scale and are unable to reduce costs while continuing to produce revenues will be gobbled up by larger players.

 

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FinanceNews

Consolidate Your Debt with a Line Of Credit or Overdraft Facility

Have you borrowed several debts and looking for a solution to consolidate all of your debt? You’re in the right place. You had a word with your certified non-profit credit counselor about debt consolidation by York Credit. You might be suggested the best option that works for you at an optimum level. If you’re a Canadian, the best alternate for debt consolidation is a line of credit or an overdraft facility.

How a Line Of Credit or Overdraft Facility works?

When you get a line of credit or overdraft facility, the creditor offers you a credit card. This allows you to purchase and combine your various loans, bills, and other credit card balances into one. Lines of credit and overdraft may either secured Or unsecured. It depends on your eligibility and a few factors as follows:

  • According to the economy, the lender’s policies change time to time
  • Your credit rating
  • Your net worth (your assets vis-à-vis your debts)

The consolidation loans are different from Lines of credit and overdrafts, as a lump sum is not given in it. But, you have to make minimum monthly repayments just like a regular loan.

More precisely, overdrafts let your bank account balance to drop below zero, primarily as a credit card until your debit account hits zero. On the contrary, lines of credit act like a separate credit account that you can use whenever you require money in cash.

Benefits of A Line Of Credit Or Overdraft Facility

  • You can get the loan at the very low-interest rate, particularly given the currently low Bank of Canada Prime Rate.
  • A minimum monthly refund is usually very flexible and you can pay off the loan as quickly or as slowly as you would like.
  • There are early repayment penalties for usual loans. You can save the interest and can clear the loan without any charges if you clear the debt before time. You may keep the account open even after your loan consolidation efforts and can use an ongoing line of credit. However, you need to remain in good standing with the lender.
  • In the case of no money, you need to pay the minimum payments that cover the interest.
  • Negotiation is so easy and quick in line of credit or an overdraft than a loan and other debt consolidation options.
  • In credit card, you need to pay interest from the moment you get a card, but in LOC or overdraft, you only have to pay interest from the time you access the money.
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Business

An Exclusive Promotional Item To Upgrade Your Business

Getting updated with current trend is an appreciation and drives confident to next level. If you looking seriously any gifts for business promotion, obviously trendy and popular choice is promotional drinkware. There are wide ranges of promotional drinkware available in market, from various price ranges, so if you looking such kind of item for business promotion then make use of online sources. Unlike other gift items, promotional drinkware can be widely used by all age groups and suitable for all occasion. This can be used as corporate gift, return gifts for parties, family get together, and birthday events and so on the list goes. Even customized drinkware is pocket friendly due to it several choices, satisfies the requirement of every individual needs.

Plan for your next event with promotional drinkware

If you are a coffee lover, loves to drink a cup of coffee everyday undoubtedly the most preferred promotional item is coffee mug, travel mugs and more to pick on. If you are still planning for upcoming event in your business, then don’t go anywhere and don’t waste times by searching directly go with promotional drinkwares, this will turn out your business even better. Customized drinkware, travel based mugs are good choice and it can be easily carry anywhere even during your travel. Let’s see some special features included in both customized drinkware and thermal flask.

  • Customized drinkware is environment friendly can saves the environment and not much expensive.
  • Companies that used to promote business through promotional is widely popular in recent decades, however to choose the right one considering various marketing strategy is bit confusing because to choose from unlimited choice of products.
  • Quality thermal flask grabs importance among people, due to it necessity in everyday life. Quality thermal flask is yet another most successful corporate gift, return gift, can be used as promotional gift at business meets.
  • Own logo can be imprinted on drinkware, this has been regarded as most efficient way to promote business
  • In recent years the promotional drinkware comes with more elegant, uniqueness than ever before thus it’s been in trending

Best promotional tool always promotes business to another level, if you have plan for drinkware just look online, wide range products available make sure to find the best and effective one. Drinkware breaks out the misconception that expensive gifts alone can draw attention and appreciation of people. These kinds of gifts, such drinkware, coffee mugs, travel mugs, ceramic mugs, thermal flask are less expensive with executive look and sure attracts the clients.

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Loans

Unsecured Business Loans: What You Need to Know

There are literally hundreds of different types of business loans that you can choose from. However, almost all loans can be broadly categorised into two options: secured and unsecured business loans. A secured loan is generally the most common type of loan given by banks and credit lending agencies. The concept is simple: the company will give you the loan amount but will take something as collateral. This is security so that in case you fail to pay back the loan, they will have something of equal or higher value which can be sold to get the money back.

An unsecured loan is also a pretty common option. Companies that give out unsecured loans don’t take anything in the way of security but they are more cautious when giving out the loan. They vet every application carefully and also charge a slightly higher interest rate because they take on more risk. If you are thinking of doing business and need some money to get started, you might want to consider applying for an unsecured business loan. Here are just a few things that you should know about taking out the loan.

An Injection of Cash

A business loan doesn’t have to be paid back immediately. The company is going to charge an interest rate and the payback period is usually over a year. You will simply have to pay back a fixed monthly instalment that includes the premium and the interest being charged on the amount. Because you don’t have to pay back the loan right away, you can plan it in such a way that you can just pay back the amount every month from the company’s profits. It’s that initial injection of cash that poses a problem for many people.

Compare Your Options

If you are interested in getting an unsecured loan, the first step that you need to take is to look for different companies that offer such loans. Compare their eligibility criteria and see if you fall in it. If you do, you can then check the interest rates and other variables before making a decision. Once you have gone through the terms and conditions and have made your decision, you can then send in an application. If your application is accepted, you will need to sign the papers and agree with the terms and conditions; within a few days, the loan amount will be transferred to your bank.

Getting an unsecured loan is one of the best ways to start a business. If you don’t have any assets to your name, you will be protected and the money will be easy to pay off, making it an excellent way to get things rolling.

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Business

Simple trading approach always boost performance

If you want to secure your trading business and want to develop a trading career, efficient plans are important. But for a rookie trader, it is hard to know about efficient trading plans. If you can develop a trading edge for the highest quality trade execution possible, there will be profits waiting for you. When you can prepare a trading plan, the performance will be consistent. Then you can develop a trading career that will be suitable to manage consistent income from the profession. For a rookie trader, it is important to manage the investment first and then learn how to manage profits. Without this strategy, no trades will bring profit potentials. Instead, you will only experience high potential loss from the trades. Therefore, you must prepare a trading plan to improve your trading quality. When you are developing the plans, think of consistent trading performance.

To improve your income in Forex, first, think of the safety of the capital. Then you will need to develop the plans. With those plans, you must prepare a trading rule. It must be used for almost every execution. You can also prepare a dynamic strategy. But the main concern is consistency, following the rules and regulations. If you can follow the same plans for almost every trade, the quality will increase automatically.

Trade with a very small investment

For a quality and safe executions, the traders need to handle the investment. It is very important for the management of risk exposure. As it is based on the investment and the lot size, you must learn the different aspect of lot size calculations. And to secure the investment, you need to reduce the lot as much as possible. Then your focus on the leverage account or else options trading will be very hard. If you can create strong money management which is simple to handle, you will have zero issues in managing the losing orders. You will also be efficient with the dynamic strategies.

Securing the investment in options trading is the main duty of the new traders in Austraila. When you are done managing it, you can make profit without any hassle. After being a pro at saving your investment, focus on the improvement of the profit potential of the trades.

Save the capital with small losses

Using simple lots and simple investment will help you to protect your trading capital in the long run. To find a suitable position for any particular trade, you will need a reference. The risk to reward ratio will help you set that. While participating in Forex, simple lot sizes will handle the orders efficiently. Therefore, you will have a high chance of managing the safety of the investment because the stop-loss will be small and safe for your trades.

So, a rookie trader should prepare plans for the small potential losses. You only need to control your excitement for high-profit potential. Getting some experience in the demo account will help you to change your mindset. When you will be ready to trade in Forex with the right mindset, the management will be strong. Thus, you will also have better control over the trades.

Follow a disciplined life

Aside from the rules and regulations for the trades, you will need to handle the business with appropriate rules and regulations. For a quality performance, a trader must prepare the most appropriate rules and follow strict regulations. For this, you must decide to prepare a routine. According to the trading style, you will need to design the routine. When you have a decent plan to execute trade regularly, your will have a strong boost in the profit factors. So, you must focus on the improvement of the strategy to ensure success. Try to accept a few disciplined methods which will bring good luck to your career.

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Finance

How to register GST online

In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply. GST registration usually takes between 2-6 working days. You can apply for GST registration Online to complete the GST registration procedure.

So here in this article, we will understand how to register for GST online.

GST registration Online procedure

  • First, individuals must visit the GST portal (https://www.gst.gov.in/).
  • Next, the individual must click on the ‘Register Now’ link which can be found under the ‘Taxpayers’ tab.
  • Next, the individual must select ‘New Registration’.
  • On the same page, the individual must fill the below-mentioned details:
    • Under the ‘I am a’ drop-down menu, select ‘Taxpayer’.
    • Select the respective state and district from the drop-down menu.
    • Enter the name of the business.
    • Enter the PAN of the business.
    • Enter the email ID and mobile number in the respective boxes. The entered email ID and mobile number must be active as OTPs will be sent to them.
    • Enter the image that is shown on the screen in the respective box and click on ‘Proceed’.
  • On the next page, enter the OTP that was sent to the email ID and mobile number in the respective boxes.
  • Once the details have been entered, click on ‘Proceed’.
  • Individuals will be shown the Temporary Reference Number (TRN) on the screen. It is vital that they make a note of the TRN.
  • Next, individuals must visit the GST portal again and click on ‘Register’ which is present under the ‘Taxpayers’ menu.
  • Next, select ‘Temporary Reference Number (TRN)’.
  • Next, individuals must enter the TRN and the captcha details.
  • Once the details have been entered, click on ‘Proceed’.
  • Individuals will receive an OTP on their email ID and registered mobile number. Enter the OTP on the next page and click on ‘Proceed’.
  • The status of your application will be available on the next page. On the right side, there will be an Edit icon, click on it.
  • There will be 10 sections on the next page. All the relevant details must be filled, and the necessary documents must be submitted. The list of documents that must be uploaded are mentioned below:
    • Photographs
    • Address proof where the business is located.
    • Bank details such as account number, bank name, bank branch, and IFSC code.
    • Authorisation form
    • The constitution of the taxpayer.
  • Once all the above-mentioned details have been entered, individuals must visit the ‘Verification’ page. Once individuals check the declaration, they must submit the application by using one of the below mentioned methods:
    • By using an Electronic Verification Code (EVC). The code will be sent to the registered mobile number of the applicant.
    • By using the e-Sign method. An OTP will be sent to the mobile number that has been linked with the Aadhaar card.
    • In case companies are registering, the application must be submitted by using the Digital Signature Certificate (DSC).
  • Once the above step is completed, a success message will be shown on the screen. The Application Reference Number (ARN) will be sent to the registered mobile number and email ID.
  • Individuals can check the status of the ARN on the GST portal.

Here in this article, we have understood the process for GST registration, it will surely be useful for you to grow your business.

The next important step in managing your business is to open current account online. Once this is done you are all set to manage and maintain your business smoothly and successfully.

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Loans

Why Mortgage Lenders Make Customers Jump through Hoops

Head down to your local bank to apply for a mortgage and you’ll find yourself jumping through one hoop after another just to get approval. The long, drawn out application process could result in you waiting weeks to actually get your mortgage. By contrast, a real estate investor or small business owner could secure a hard money loan in a matter of days. So what’s the difference?

Much of the difference boils down to who assumes the majority of risk on a loan. A bank making a 30-year mortgage is doing so with the understanding that it can sell said mortgage to Fannie Mae or Freddie Mac, thereby reducing its risk substantially. A hard money lender, on the other hand, assumes almost all the risk of lending.

Of course, such a simple explanation doesn’t really help you understand what’s going on here. So let’s look at it in more detail. Suffice it to say that the 30-year bank mortgage is not all it’s cracked up to be.

Strict Lending Requirements

Banks obviously have their own lending requirements in place. They have to if they want to mitigate as much risk as possible. But consider this: risk increases the longer a mortgage lasts. So why would banks offer 30-year mortgages? For that answer, we go back to the end of World War II and the post-war housing boom.

The 30-year mortgage was essentially a government creation intended to get more people to buy homes. The thinking at the time was that a 30-year mortgage made home ownership more affordable by giving people more time to pay the bill. Then along came Fannie and Freddie. Through these two programs, the government essentially encouraged banks to grant mortgages to people who really couldn’t afford them by ensuring such mortgages against loss.

In exchange for the insurance, lenders were required to adopt new lending practices they otherwise would not have utilized. Those practices were made even more strict following the 2008 housing crash. Today’s borrowers have to jump through a lot more hoops because government regulators want it that way. Ironically, Freddie and Fannie continue to encourage lenders to offer mortgages to people who really cannot afford them.

Hard Money is the Polar Opposite

You would never use a hard money loan to buy a home that would act as your primary residence. Still, understanding how hard money loans work offers a stark contrast to the way traditional banks do business. When an investor or business owner applies for hard money, there are no hoops at all to jump through.

Remember, the government takes on most of the risk of a typical 30-year mortgage. The risk in hard money rests solely on the lender. With that in mind, hard money lenders focus primarily on how they can recoup their money in the event of borrower default. There is only one way to do that: repossess and sell the collateral offered as backing for the loan.

According to Salt Lake City’s Actium Partners, property is the most commonly used form of collateral for hard money lending. Lenders care mainly about the value of the property and its current marketability. They are less interested in a borrower’s personal income, credit history, employment, etc. As long as the collateral is solid and valuable enough, risk is minimized.

You jump through hoops to get a 30-year mortgage because, like everything else controlled by the government, bureaucracy requires it. There are no hoops in hard money lending because it is a completely private enterprise between two parties. And now you know.

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