Home Development Mutual Fund
Owning a home is one of the grandest goals that an individual can aspire to and a Home Development Mutual Fund has been specifically designed to help. Americans especially, attach a lot of importance to home ownership. A home not only betokens hard work, it speaks of self-disciple, and yes it spells success. Unfortunately, this is not a dream that many people get to realize in spite of their noble intention to do so. The reasons for this might be aplenty but it always boils down to one thing – finance. Yes, your dream to own a house is hinged on the money factor. You might not have a ton of money yet but there is one avenue through which you can get to purchase your home.
What is a Home Development Mutual Fund?
In the simplest definition, a home development mutual fund is a form of provident fund. The jack pot of this fund is normally the outgrowth of individual contribution to the scheme. In other words it is a sort of co-operative movement whose end goal is to empower members to have the financial wherewithal of owning a home. That in a nutshell is what a home development mutual fund is all about.
These entities in most instances are nonprofit in nature and this is the major difference between such an entity and your typical mortgage finance firm. Other marked differences are highlighted below:
1. First is the fact that for a mortgage firm, the down payment required before you make an initial deposit might be in many respects way above what many people can afford. This is not the case with the mutual fund that has a lower threshold for members to meet.
2. The second issue that marks out such an entity from the mortgage finance schemes in the market is by way of the duration that one can service a house loan. Your typical mortgage firm will insist on a member servicing his loan in under 15 years. This is different in such firms that can have products that extend to some 25 years or in some instances even inter-generational loans. This is a package that you rarely get in your typical commercial loan.
3. The third difference between these entities from the typical mortgage firm is in the goal that is pursued. Your average mortgage finance firm is in the business for money, at the end of the day. It is the bottom line that counts. Woe unto you if you fall out of favor with them. Your home development mutual fund is in the business of building lives. The figures they deal with are not just that, they are real human beings. This explains why this entity will accommodate all your needs in your quest to own a home.
The funding of the home development mutual fund is courtesy of four revenue streams – the taxpayer who funds the state, the industrial sector that provides subsidy on building products, commercial institutions such as banks and insurance agencies who finance some of the funds projects and cover the funds risk, and lastly the people who by courtesy of their faith ensure that this noble idea marches on. This is the reality behind the existence of the best mutual funds for home ownership.
If you, the reader, are having issues determining what exactly the benefits of joining such a fund are, then the following advantages might convince you to join the fund:
- Foremost is the fact that you essentially get to have a housing unit that is heavily subsidized. With vagaries such as inflation and the laws of supply and demand, such an option is worth mulling over.
- Secondly is the fact that you get to own a home after you are through with the payment schedule. This means that you get to own a home that testifies to your years of hard work. It also gives you a place to stay after retirement.
- Lastly, you can pass on this gift to the next generation courtesy of the intergenerational loan product in the scheme. In the event that you are unable to continue paying your mortgage, you need not lose the house because there are insurance cover schemes that you can take to offset such a risk (within the HBMF).
Fancy getting your own home? Then a home development mutual fund (HDMF) would be your ideal solution. Think about it.