A great seminar title is important because it will draw people’s interest - or not. When people read a title or heading it takes them only a few seconds. During that time they decide to either read on or throw the brochure in the bin. If you have a great title that makes them curious, then they will read on and may decide to attend the seminar. If it sounds boring, they will not attend.
A title needs to appeal to the emotions - to the right side of the brain. If it contains a fact supported by figures then the left side of the brain assimilates it and no emotion is felt. Take for instance this title: 40% of Retirees Need Nursing Care”. A title like this, containing figures, is a really bad idea. It tells us a fact supported by a number. It has no emotion, no human warmth to it.
If the seminar is about the cost of nursing home care, then make it more personal. “Mrs. Jones Cannot Afford to Buy Her Grandson a Birthday Present. Could This Happen to You?” is far more emotive. First it speaks about a person and we know immediately that she is a grandmother. Grandparents will immediately be compelled to read on to find out why, and how they could be affected by the same problem.
People very often want to find out about other people, so they will read on to find out what happened to Mrs. Jones that she couldn’t buy her grandson a birthday present.
So the title has done its job of making the person read on. It has appealed to the emotions. It also needs to appeal to the right target group. But if you were not targeting grandparents in your seminar, then that would not be the right title for you.
Another thing to watch for is the use of the word ‘you’. Using ‘you’ in the title will make it seem to be speaking directly to the reader. If you use ‘they’ instead, the reader immediately has the perception that this is for someone else. The tense used is also important. Present tense is the more immediate. It is happening now, not some time in the past.
The above title is written it the present tense. In past tense the problem would be over and done with, therefore the reader would feel that nothing could be done about it and it is in the past. They can lose interest.
A good title will evoke emotion and a feeling of curiosity. A question must be answered. People will read on and consider attending the seminar to get the answer.
Today we begin a series of podcasts on producing great seminars. We hope you enjoy them.
Tuesday, September 2, 2008
Wednesday, August 27, 2008
Tips for Getting a Mortgage When You’re Self-Employed
Traditionally, lenders need to scrutinize the applicant’s income history, their ability to pay on time, and their immediate debts before agreeing to give them a mortgage. This all poses problems for the self-employed because they are so busy, they may not keep regular records of all their finances. And if they are paid in cash, it’s really easy to use that cash to pay their bills, rather than document it as income.
And those people who are self-employed are often in the position that they cannot be 100% sure of their income from month to month. In one month they may make an excellent income, but in the following month they could make very little. This makes the regular repayment of any debt like a mortgage difficult. In fact, it makes lenders a bit dubious about agreeing to a mortgage at all.
So the first thing a borrower must consider is whether he can indeed, pay back any loan he gets. What is the point of getting a mortgage, and then not being able to pay it back? To be considered by a lender, self-employed people are also usually required to have a large deposit.
So to get a mortgage when you are self-employed, you could settle for what is called a low-doc loan. This is basically a loan where you don’t have to provide the documentation proving that you receive a steady income. Nor do you have to provide anything to prove that your credit history is good.
Of course there is a downside; you will have to pay high interest on your loan. You will also have to pay mortgage insurance, so the lender can be sure of getting his returns. Since the lender will usually give a low-doc loan without making sure you can repay it, you need to do the math yourself. If you are not sure you can repay, then you are better off not getting the loan in the first place.
Another option is to apply for a flexible mortgage. While you will be hit with an exorbitant interest rate for the privilege of borrowing this money, you do have one saving factor. You are not required to pay a fixed sum every month. You can pay none, or just a little. Or if you are having a good month, you can pay a lot. And if you’ve paid a big lot in one month, then find yourself strapped or cash the next month, you can borrow your payment back again. It is certainly flexible - the downside of not making regular payments of course, is that you’ll be in debt for a great deal longer than otherwise.
And those people who are self-employed are often in the position that they cannot be 100% sure of their income from month to month. In one month they may make an excellent income, but in the following month they could make very little. This makes the regular repayment of any debt like a mortgage difficult. In fact, it makes lenders a bit dubious about agreeing to a mortgage at all.
So the first thing a borrower must consider is whether he can indeed, pay back any loan he gets. What is the point of getting a mortgage, and then not being able to pay it back? To be considered by a lender, self-employed people are also usually required to have a large deposit.
So to get a mortgage when you are self-employed, you could settle for what is called a low-doc loan. This is basically a loan where you don’t have to provide the documentation proving that you receive a steady income. Nor do you have to provide anything to prove that your credit history is good.
Of course there is a downside; you will have to pay high interest on your loan. You will also have to pay mortgage insurance, so the lender can be sure of getting his returns. Since the lender will usually give a low-doc loan without making sure you can repay it, you need to do the math yourself. If you are not sure you can repay, then you are better off not getting the loan in the first place.
Another option is to apply for a flexible mortgage. While you will be hit with an exorbitant interest rate for the privilege of borrowing this money, you do have one saving factor. You are not required to pay a fixed sum every month. You can pay none, or just a little. Or if you are having a good month, you can pay a lot. And if you’ve paid a big lot in one month, then find yourself strapped or cash the next month, you can borrow your payment back again. It is certainly flexible - the downside of not making regular payments of course, is that you’ll be in debt for a great deal longer than otherwise.
Saturday, August 23, 2008
Why Lower Interest is NOT Always Better
Those in the market for a home loan will always look to get the lowest interest that they can. After all, the higher the interest, the more you have to pay, and that is what makes paying the loan back so much harder. So can there ever be a time when lower interest is not better than high interest?
Yes, but it depends on your financial circumstances. It’s always good to be able to claim a tax deduction, and the interest you pay on the loan for your first and second homes can be claimed off your tax. There are certain rules of course. Interest paid on the first $100,000 is tax deductible. Once that limit is reached, other rules apply, depending on what the loan was used for. If it was used for improvements to the first or second home, or to purchase a second home then the limit can go to $1 million - or to the value of the home.
So if you have managed to find a very low interest loan, it could be that you are not saving as much as you thought. But to find out for sure, and if you want to make that tax deduction, it’s a wise move to consult with a tax advisor. You don’t want to get in trouble for inadvertently doing the wrong thing.
It sometimes happens that you have to prepay some of the interest. This happens if you close the deal through the month, rather than on the 1st of the month, which is when most lenders want their mortgage payment to be due. So don’t forget that prepaid interest is also tax deductible.
To claim these deductions you need to itemize them on your tax return. Since all the rules and regulations are confusing to say the least, it’s wiser to get a certified public accountant to handle it all for you.
Other fees such as the loan origination fee are also tax deductible. While this particular fee is actually a percentage of the loan amount, it is mostly expressed as ‘points’. It is helpful for you to have it converted to a dollar amount so you can better understand how much it is, but for it to be tax deductible, it must be written down as points, e.g. 1 point or 2 points. Any discount points are also tax deductible.
This is the eighth podcast of our series on getting the best home mortgage.
Yes, but it depends on your financial circumstances. It’s always good to be able to claim a tax deduction, and the interest you pay on the loan for your first and second homes can be claimed off your tax. There are certain rules of course. Interest paid on the first $100,000 is tax deductible. Once that limit is reached, other rules apply, depending on what the loan was used for. If it was used for improvements to the first or second home, or to purchase a second home then the limit can go to $1 million - or to the value of the home.
So if you have managed to find a very low interest loan, it could be that you are not saving as much as you thought. But to find out for sure, and if you want to make that tax deduction, it’s a wise move to consult with a tax advisor. You don’t want to get in trouble for inadvertently doing the wrong thing.
It sometimes happens that you have to prepay some of the interest. This happens if you close the deal through the month, rather than on the 1st of the month, which is when most lenders want their mortgage payment to be due. So don’t forget that prepaid interest is also tax deductible.
To claim these deductions you need to itemize them on your tax return. Since all the rules and regulations are confusing to say the least, it’s wiser to get a certified public accountant to handle it all for you.
Other fees such as the loan origination fee are also tax deductible. While this particular fee is actually a percentage of the loan amount, it is mostly expressed as ‘points’. It is helpful for you to have it converted to a dollar amount so you can better understand how much it is, but for it to be tax deductible, it must be written down as points, e.g. 1 point or 2 points. Any discount points are also tax deductible.
This is the eighth podcast of our series on getting the best home mortgage.
Wednesday, August 20, 2008
Should You Accept Seller Financing?
There are many good points to be considered in seller financing. In cases where the buyer finds it difficult to get a conventional loan, seller financing may be the solution. From the buyer’s point of view, seller financing costs less because there are none of the many fees and closing costs associated with the loan.
With a conventional loan, having a substantial down payment is necessary to avoid insurance and high interest rates. If the buyer does not have a down payment - or only a small one - seller financing can be negotiated in a way that does not penalize him or her. Repayments can be negotiated to favor the buyer, much more so than in a conventional loan.
The buyer needs to be aware that when seller financing is in place, there need be no check on the condition of the property, such as would take place with a conventional loan. If repairs are needed, this will naturally be in the seller’s favor rather than the buyer’s. However, if the state of disrepair is obvious, then the buyer may be able to negotiate a price difference to account for it. Some repair problems are not easily visible, so this is a risk for the buyer. He must agree to purchase the property ‘as is’.
Another risk for the buyer is if the seller still owed money on the property and does not pay it off. The buyer could pay his installments promptly every month and still not receive anything at the end but foreclosure. There is risk for the seller as well, of course. He should run a credit check on the buyer, but this can be difficult. The fact that the buyer is accepting seller finance is often due to him being unable to get a conventional loan. And if he does not qualify for a conventional loan, there is usually a reason for it.
That’s not to say the buyer would necessarily be in any way dishonest - but he could have trouble paying off a loan. He might agree to the down payment requested by the seller and then default on that, if he does not have it. So the seller could waste a great deal of time and be disappointed with no sale at the end.
What it comes down to is trust and honesty from the two parties involved. If both do the right thing and are honest in their dealings, then seller financing can be a good thing for both.
This is the seventh podcast of our series on getting the best home mortgage.
With a conventional loan, having a substantial down payment is necessary to avoid insurance and high interest rates. If the buyer does not have a down payment - or only a small one - seller financing can be negotiated in a way that does not penalize him or her. Repayments can be negotiated to favor the buyer, much more so than in a conventional loan.
The buyer needs to be aware that when seller financing is in place, there need be no check on the condition of the property, such as would take place with a conventional loan. If repairs are needed, this will naturally be in the seller’s favor rather than the buyer’s. However, if the state of disrepair is obvious, then the buyer may be able to negotiate a price difference to account for it. Some repair problems are not easily visible, so this is a risk for the buyer. He must agree to purchase the property ‘as is’.
Another risk for the buyer is if the seller still owed money on the property and does not pay it off. The buyer could pay his installments promptly every month and still not receive anything at the end but foreclosure. There is risk for the seller as well, of course. He should run a credit check on the buyer, but this can be difficult. The fact that the buyer is accepting seller finance is often due to him being unable to get a conventional loan. And if he does not qualify for a conventional loan, there is usually a reason for it.
That’s not to say the buyer would necessarily be in any way dishonest - but he could have trouble paying off a loan. He might agree to the down payment requested by the seller and then default on that, if he does not have it. So the seller could waste a great deal of time and be disappointed with no sale at the end.
What it comes down to is trust and honesty from the two parties involved. If both do the right thing and are honest in their dealings, then seller financing can be a good thing for both.
This is the seventh podcast of our series on getting the best home mortgage.
Monday, August 18, 2008
Who Regulates Mortgage Lenders?
Most financial institutions are regulated by someone to keep them accountable. The Department of Financial Institutions (DFI) is one such watchdog. Not all financial institutions come under their jurisdiction though; only those in California. These include banks, credit unions, trust companies, industrial loan companies and others that are all state-licensed.
Those lending institutions whose names include the word ‘national’ are the ones that are regulated by the state they are in. E.g. City National Bank or Bank of America, NA. Thus each state has its own regulatory body for the mortgage lenders in that particular state.
Those financial (lending) institutions whose names include the word ‘federal’ or the initials FA, FSLA or FSB are usually regulated by the Office of Thrift Supervision, a Department of the Treasury.
The Department of Corporations is responsible for licensing mortgage and finance companies, while it is the Department of Real Estate that licenses mortgage brokers and some other mortgage lenders. The National Credit Union Administration regulates federal credit unions. They should have the word ‘federal’ or the initials FCU in their titles.
To find out who regulates your particular lending body, check out the documents you have from them. In some cases, the pertinent name or initial may be left out of advertising.
If you have a problem with your lending institution, then you could start off by contacting the Federal Reserve Consumer Help. You can file a complaint through them and they will investigate it. It must be a legitimate complaint such as discrimination, violation of regulation or law, or if you think they’ve misled you or been unfair in some way.
Of course to be fair you should first try to settle the complaint by going to your lender, but if that doesn’t work, then the phone number for the above body can be found on their website. You can also write, fax or email them. Be sure to include your full contact details and a description of your complaint, including dates and names.
The Federal Reserve Consumer Help will be able to tell you what the regulatory body is for the lending institution you deal with. If they are the ones who regulate it, then one of their twelve Reserve Banks will deal with it. This usually takes between 30-60 days, though in the case of more serious allegations it could take several months.
They are unable to help in some areas, such as disagreements over particular bank procedures and policies, or if there is a lawsuit impending.
This is the sixth podcast of our series on getting the best home mortgage.
Those lending institutions whose names include the word ‘national’ are the ones that are regulated by the state they are in. E.g. City National Bank or Bank of America, NA. Thus each state has its own regulatory body for the mortgage lenders in that particular state.
Those financial (lending) institutions whose names include the word ‘federal’ or the initials FA, FSLA or FSB are usually regulated by the Office of Thrift Supervision, a Department of the Treasury.
The Department of Corporations is responsible for licensing mortgage and finance companies, while it is the Department of Real Estate that licenses mortgage brokers and some other mortgage lenders. The National Credit Union Administration regulates federal credit unions. They should have the word ‘federal’ or the initials FCU in their titles.
To find out who regulates your particular lending body, check out the documents you have from them. In some cases, the pertinent name or initial may be left out of advertising.
If you have a problem with your lending institution, then you could start off by contacting the Federal Reserve Consumer Help. You can file a complaint through them and they will investigate it. It must be a legitimate complaint such as discrimination, violation of regulation or law, or if you think they’ve misled you or been unfair in some way.
Of course to be fair you should first try to settle the complaint by going to your lender, but if that doesn’t work, then the phone number for the above body can be found on their website. You can also write, fax or email them. Be sure to include your full contact details and a description of your complaint, including dates and names.
The Federal Reserve Consumer Help will be able to tell you what the regulatory body is for the lending institution you deal with. If they are the ones who regulate it, then one of their twelve Reserve Banks will deal with it. This usually takes between 30-60 days, though in the case of more serious allegations it could take several months.
They are unable to help in some areas, such as disagreements over particular bank procedures and policies, or if there is a lawsuit impending.
This is the sixth podcast of our series on getting the best home mortgage.
Thursday, August 14, 2008
How to Refinance Your Mortgage
If you have a mortgage and you find it hard to keep up the payments due to some problem like a cut in your income or interest rates rising, then refinancing may be for you. When you refinance, you are actually taking out a new mortgage and using it to pay off other one. Since you still have payments to make on the new one, how is this any better?
It is better because the terms of the new mortgage will be different. Your old mortgage was most likely an adjustable rate mortgage, which means that every time the interest rates go up, so do your payments. When you refinance, you’ll negotiate lower interest rates - and you’ll make sure that your mortgage is at a fixed rate, so future rate rises will not affect it.
Knowing that your monthly payments will not rise by any marked amount for the term of your loan gives you peace of mind. It is still possible to see small increases due to the cost of insurance etc rising. But don’t forget that when you refinance, there will be added costs for the new mortgage, so you need to be sure that what you save in the interest will be worth it in the long run.
Some people might feel that if they just extend the terms - length of time - of the loan they have, that will be better and save them the cost of refinancing. But this is not so. To extend the time period will certainly mean that you pay less each month, but over the life of the loan you’ll end up paying more. This is because you’ll be paying more interest.
If you have other debts that you are paying high interest on, such as credit card debts, refinancing can be a good thing to do. This is because you can refinance to get some extra cash out and use this to pay off your debt. If the new loan is at a fairly low rate of interest, then you’ll save a great deal of money in two ways.
Firstly you’ll only pay low interest on that credit card debt instead of high interest and secondly, that interest is also tax deductible, whereas the interest on consumer debt is not.
The downside of it is that if you cannot pay your monthly installments, then you could lose your home. Credit card debt alone cannot cause the loss of a home, only unpaid mortgage debt can. Just remember that refinancing is no answer to undisciplined spending.
This is the fifth podcast of our series on getting the best home mortgage.
It is better because the terms of the new mortgage will be different. Your old mortgage was most likely an adjustable rate mortgage, which means that every time the interest rates go up, so do your payments. When you refinance, you’ll negotiate lower interest rates - and you’ll make sure that your mortgage is at a fixed rate, so future rate rises will not affect it.
Knowing that your monthly payments will not rise by any marked amount for the term of your loan gives you peace of mind. It is still possible to see small increases due to the cost of insurance etc rising. But don’t forget that when you refinance, there will be added costs for the new mortgage, so you need to be sure that what you save in the interest will be worth it in the long run.
Some people might feel that if they just extend the terms - length of time - of the loan they have, that will be better and save them the cost of refinancing. But this is not so. To extend the time period will certainly mean that you pay less each month, but over the life of the loan you’ll end up paying more. This is because you’ll be paying more interest.
If you have other debts that you are paying high interest on, such as credit card debts, refinancing can be a good thing to do. This is because you can refinance to get some extra cash out and use this to pay off your debt. If the new loan is at a fairly low rate of interest, then you’ll save a great deal of money in two ways.
Firstly you’ll only pay low interest on that credit card debt instead of high interest and secondly, that interest is also tax deductible, whereas the interest on consumer debt is not.
The downside of it is that if you cannot pay your monthly installments, then you could lose your home. Credit card debt alone cannot cause the loss of a home, only unpaid mortgage debt can. Just remember that refinancing is no answer to undisciplined spending.
This is the fifth podcast of our series on getting the best home mortgage.
Wednesday, August 13, 2008
How Much Insurance Do You Need for Your Mortgage?
There are two types of insurance that apply to a mortgage and the one you see most often is the lender’s mortgage insurance (LMI). It is sometimes known as Private Mortgage Insurance (PMI). While many borrowers think that this will protect them, it doesn’t. It is aimed directly at protecting the lender if you default on your payments.
While it does not seem right that you should have to pay lender’s insurance, that’s the way of the world and you can’t do anything about it.
This is the fourth podcast of our series on getting the best home mortgage.
While it does not seem right that you should have to pay lender’s insurance, that’s the way of the world and you can’t do anything about it.
This is the fourth podcast of our series on getting the best home mortgage.
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