If you need extra money for home improvements, debt consolidation or even to purchase an additional home then a second mortgage might be exactly what you are looking for to make that happen. However, when you hear the term second mortgage you might not be sure exactly what it means. To put it simply it is just another mortgage on your existing home. Basically you are borrowing money for one or more reasons and using your home as collateral.

The term “second” means that the loan you are taking out does not have priority on your home if for some reason you can’t pay it back on time. In all cases the initial mortgage on your home would be paid before any money would go toward a second mortgage payment. With that being said, the next question is why in the world someone would put their home up as collateral for money. Well, the answer is that you shouldn’t unless you are in a situation where you need a large amount of money fast.

Western Vista Federal Credit Union in Wyoming notes that a “second mortgage is what it says – the second loan against a specific piece of property. Consider this example: Let’s say you have a first mortgage on your home. The value is $100,000 and you have a $60,000 balance left to pay on your loan. The $40,000 difference is considered equity, or the part of the home that you own outright. If you wish to further borrow against that $40,000, you would be taking out a second mortgage on the home in order to do so. Why borrow against this equity? In many cases, the interest rate you pay on your mortgage is lower than many other types of loans. Interest is also frequently tax deductible for a first or second mortgage, but not necessarily for a car loan or a credit card.”

When a person borrows money against their home that’s a large chunk of change being used for collateral and it also allows the borrower to get a bigger loan. There are some disadvantages to second mortgages such as the fact that you are taking a chance with your home should something happen and you have trouble paying the second mortgage back.

Take a look at the interest rate on a second mortgage too. You can probably expect the rate to be a bit higher because it is riskier to the lender who knows that if a default occurs the primary mortgage gets paid first and then the second mortgage. You can also be choosy about a second mortgage so check more than one source when trying to make a decision. Watch out too for balloon payments, which is a payment that starts out low and rises as time goes by. If possible, choose a fixed interest rate. Also be aware that second mortgages, like any other loans, have additional closing costs. There are the appraisal fees, application costs and other closing costs that can be as random as title searches.

At the Mortgage101 they say, “Many companies will charge a fee for lending you money. The fee is usually a percentage of the loan and is sometimes referred to as “points.” One point is equal to one percent of the amount you borrow. For example, if you were to borrow $10,000 with a fee of eight points, you would pay $800 in “points.” The number of point’s mortgage companies charge varies, so it may be worthwhile to shop around.”
You also want to make sure you get a second loan that allows you to keep your first mortgage.

In the long run second mortgages are a good bet for home improvement financing and some second mortgages can even be extended for up to 20 years. Remember though, it’s not only home equity lines of credit that don’t outline the amount of the monthly payments so read your contract. There are many second mortgage loans that don’t either. Joe Prussack notes, “Everybody loves low monthly payments… These popular 2nds’ (second mortgages) also usually have adjustable rates so these loans aren’t for the faint hearted.” In this case, if you are one of the fainthearted then stick with a fixed interest rate versus one of the variable interest rate loans. This way you will know exactly what payments are expected each month be it for a second mortgage or another type of loan in order to secure a big ticket item that you have needed for the past few years.

There are many different mortgage types and it is important to know the differences between the various options. Knowing the pros and cons of each mortgage type can potentially save you a lot of money. Here is an overview of some of the less common mortgages offered. Three of the different mortgage types are: flexible-payment option ARM, interest-only ARM, and the convertible ARM.

Flexible-Payment Option ARM (Adjustable-Rate Mortgages)

The flexible-payment option is different because the person who borrows can choose from a variety of payment options every month. There is a “change cap,” which does limit how much the payments can vary each year. A major positive is that this method can easily lower your interest rate when needed. This option is ideal for people who having varying incomes, such as people who receive sales commission; it might be better for him/her if their payment is less during slow times in their field. A major problem is that some of the options offered will not cover the interest paid. Also, negative amortization can occur when lower payments lead to an increase in your monthly balance. These payments could increase tremendously. Sooner or later, you will have to pay off the principal and the payments will increase substantially. Do not choose this mortgage if you cannot afford the principal.

Interest-Only ARM

For a stretch of time, you will not pay the principal and only pay the interest. This mortgage is nice if you do not plan on staying in a house for a long period and allows you to afford something that might normally have been out of your price range. If the market is hot or you live in a premium neighborhood, you could have low payments while the house appreciates in value. There is always the option of paying money towards the principal while the payments are low; payments on the principal reduce your monthly payments. This type of mortgage is nice for people who are either on commission or have bonuses that are a good portion of their income that come in one lump sum. A problem is that in the long run you will have to pay back the principal; this could be a major problem if the market has gone down and the value of your house falls with it. A common strategy is to invest the money made off the interest-only loan and build it up towards the principal. Be cautious, because if you cannot afford the interest payment and the principal at the same time, then the house is probably out of your income range. Also, if your plan was to sell the house soon after taking out the loan and the house is not selling, this could also hurt you.

Convertible ARM

A convertible ARM is an ARM loan that can be converted to a fixed rate after a period of time. This type of loan can save you on refinances costs if you had planned on refinancing regardless. A con is that you will have a higher fixed rate with the convertible loan; you will also not be able to shop around for better deals. The convertible loan does save you on shopping around and refinancing, but you may end up paying more on the fixed loan than you would have with the refinanced rates.

Getting a home loan with bad credit has actually never been easier than it is today. Here are some tips to help improve your chances of success:

Find A Good Real Estate Deal – If you can find a property that has some equity in it when you purchase it, you may have an easier time getting financing on that property. To the lender it may be almost as good as if you had some kind of down payment on the property. Some lenders will consider the properties loan to value ratio when they consider the loan. Talk to your mortgage broker and see if this factor could help you get qualified.

Try Creative Financing – See if the seller would be willing to carry back a second mortgage on the home. This is where you set up a contract or agreement with the seller that you will pay them monthly payments, including interest of, let’s say, $150/mo on $10,000 dollars of the price of the property, as a second mortgage. Then, to make it nice for the seller, perhaps put in the agreement that the entire amount is due in full within 2 years or something. That should give you plenty of time to refinance and then the seller doesn’t feel permanently locked into the contract.

Save For A Down Payment – There are lenders who may be able to qualify you for 100% financing, even with low credit scores, but your interest rate will be much lower if you can put even 3-5% down. If possible, try to save as much as possible for a down payment. Sometimes it may be better to wait about 3-6 months to get into a new home loan if it means the difference of having a down payment. The interest rate could be quite a bit better because of that factor. However, if you don’t want to have a down payment, you can always refinance later for a lower interest rate.

Shop Around – There are some mortgage brokers out there that you will talk to who will say, “I can’t help you, and if I can’t help you, no one can help you.” But, if you persist in talking with other brokers, 10 minutes later you could be talking to someone who knows a way to help you, no problem. Most brokers feel that if they can’t help you, no one can. However, the ironic thing is that each broker is varied in the types of loans they can do. Some brokers have relationships with flexible mortgage lenders and others do not. I recommend applying online to mortgage services that will submit your application to multiple lenders. That way, your credit is only pulled once, and you can analyze offers from multiple lenders. To see our list of recommended bad credit mortgage lenders, visit here recommended bad credit
mortgage lenders

Improve Your Credit Score – There are some really simple ways to improve your credit score without spending too much time at it. All 3 major credit bureaus now have areas on their websites where you can dispute incorrect items on your credit. The process is very quick and easy. Make your current payments on time to help your score. Keep your number of credit inquiries down. Too many inquiries can hurt your credit score. If you want to buy a house, don’t apply for any credit cards, auto loans or any other type of loan if you can avoid it. For your reference, here are the links to all 3 major credit bureau’s websites: www.abcloanguide.com/credithelp.shtml

If you really do want to get into a home, don’t let bad credit stop you. There are lenders out there who can help you, it just takes some persistence. Apply with multiple lenders. Like I said, apply with mortgage services that specialize in bad credit mortgage loans and will submit your application to multiple lenders with only having one credit inquiry.

Mortgage Marketing Letter Tip #1: Know your readers well – You can’t influence everyone, so why waste time and money contacting consumers who have no interest in your mortgage services? It’s vital that you thoroughly research the most appropriate way to reach your target audience.

How you generate the contact information for the people you’re sending your mortgage marketing letter to is not as important as who receives that message. There are numerous companies that will create worthwhile lists of potential customers who might need your lending services. Most likely, the names were collected because the person showed a prior interest in purchasing or refinancing a home.

You could also create a list yourself. Organize a free giveaway that entices the people you want to reach. In return for the complimentary product/service you give away, ask for each person’s name and mailing address. Be prepared, though, as some people might be hesitant to offer this information. You’ll want to emphasis the information is for internal use and will not be shared with outside parties.

Mortgage Marketing Letter Tip #2: Grab your reader’s attention immediately with an offer – You only have seconds before a reader gets bored and moves on, so use your time wisely. How is your lending company different from the competition? Whether the benefit(s) you’re providing to your customers is a risk-free offer or a unique service, make sure it’s the first point your reader sees.

Your offer might include free information, a no obligation consultation, a contest, an exclusive invitation or a limited-time discount.

One of the most common mistakes marketing writers make is to focus their writing toward an aspect of the lending firm that is too obvious. How many times have you seen a mortgage marketing letter praising a company’s customer service as its competitive edge? As a consumer, you assume any lending firm you work with will be able to service your needs at a high level. If they didn’t, you wouldn’t contact them in the first place. So determine another facet of the business that sets you apart from your competitors. With a little creativity you should be able to find something that makes your lending firm unique.

Also, avoid the urge to copy the marketing techniques used by other companies in your field. Not only is this unoriginal, but it will cause you to duplicate a plan that might not be effective. No one else knows your business better than you, so don’t be afraid to take a risk with your mortgage marketing copy.

Mortgage Marketing Letter Tip #3: Tell your audience what you want (your call to action) – How are your readers going to know what you want from your mortgage marketing letter if you don’t tell them? Yes, I know this seems obvious, but far too often this important step is forgotten.

For example, if you want your potential customer to call for a free consultation, include a phone number (toll-free is always best) that will allow your readers to talk with a live person. The fastest way for your new customers to lose interest is by answering the call with a recording – especially when you’re encouraging their phone calls.

The popularity of the Internet has led some lending companies to use a call to action that encourages readers to visit their websites (e.g., Visit us online today at [http://www.xyzlendingcompany.com] to fill out your loan application).

Another common request in lending companies’ marketing letters is to have the reader respond back with a postage-paid mailer. This is effective because many people view filling out a card and returning it less of a hassle than a phone call. Here’s a reminder for your return mailers: Be sure to clearly restate your offer because some people will skip your mortgage marketing letter altogether and go right to the response card.

In addition to explaining your call to action, let readers know what type of person is ideal for your lending program. If you’re a large firm specializing in helping people with bad credit secure loans, tell your readers. On the flip side, if you don’t want to deal with low credit scores, make this fact known. By narrowing down your audience, you’ll demonstrate a niche, which often leads to increased credibility.

Mortgage Marketing Letter Tip #4: Establish a deadline to encourage immediate action – Once you’ve hooked your readers with the offer and explained the action you want them to take, set a deadline for responses. You could even present discounts or special deals as incentives for acting quickly. This would also be a good time to re-introduce that magic four-letter “F” word – FREE. After all, when was the last time “free” failed to grab your attention?

For those times when you need your readers to act even faster, take the deadline a step further by making your offer available to only a select number of customers. A benefit of this technique is that the readers who respond will feel like a select member of an elite group.

Mortgage Marketing Letter Tip #5: Back your offer up with a guarantee – Your writing won’t persuade anyone unless you’re convinced first. So state your message confidently and back it up with a guarantee. A lending company that uses a guarantee will almost always be perceived as more credible than a firm that doesn’t apply this writing tip.

Your guarantee can cover your pricing, customer service, response time, the time it takes to close the loan, etc. The benefit of a guarantee is that your readers will feel like there is limited risk when contacting you or trying your service.

Mortgage Marketing Letter Tip #6: Use basic words or phrases that create visual images – Active verbs and attention-grabbing adjectives are the best way to create visual images in your readers’ minds – but don’t get too carried away. Also, write to your audience in a tone and vocabulary they understand (studies show most people read at an 8th grade level). Frequent use of the words “you” and “your” is one effective way to communicate directly with a reader.

Creating mental images in the minds of potential customers will require separate techniques for different audiences. A wealthy, well-educated businessman doesn’t develop the same visual images as a young newlywed who just purchased his first home. This statement might seem obvious, but you’d be amazed at how many mortgage marketing letters I see that are improperly targeted to a mass audience of varied and unrelated consumers.

Connecting with a reader on an emotional level is the primary key in getting your message to sink in. You want your readers to feel like the text is speaking directly to them. So put yourself in their shoes. Why would your offer be appealing to your readers? If you don’t know, ask your customers why they’re funding their mortgage with you. This can be done through a mailed survey or over-the-phone conversations. Not only will you receive valuable feedback, you’ll also find the most effective ways to write your mortgage marketing copy.

Mortgage Marketing Letter Tip #7: Use testimonials from satisfied customers – Consumers relate to people who are similar to them. Luckily for you, satisfied customers are more than happy to volunteer praise. To back up your marketing message, get a few flattering remarks in writing and match those testimonials to the needs of your target audience. What are the unique selling propositions you stress? Get people to praise those specific aspects of your lending company.

For any testimonial, the two questions you want answered are the following: Prior to using XYZ’s lending services, what challenges were you facing? And, now that the service is complete, how is your situation different? Vague statements such as “Your service is great!” or “This lending program works well.” fail to give details as to why your lending company is better than the competition.

When it’s time to collect testimonials, don’t wait. Timing is an essential component when developing an effective testimonial. The longer you wait, the less likely your chances are for getting useful feedback. Approach your clients with a testimonial request while their satisfaction is still at its peak.

And a final point about your testimonials – always use your source’s full name and location. Limiting a person’s name to initials only leaves a reader guessing the validity of the statement. When people put their names next to comments about your lending company, you can be sure they support your services.

Mortgage Marketing Letter Tip #8: Use an appropriate length with bullets and subheads – The length of your marketing letter will depend on the situation, but longer is not necessarily better. As with any type of marketing copy, strive for quality over quantity and make certain each word is a necessary component to the sentence.

A common rule of thumb in direct-mail writing is the more expensive the item or service, the longer the letter. If your offer is strong enough, your audience won’t mind reading a lengthy explanation.

When it comes to formatting your mortgage marketing letter, don’t forget about bullets, subheads and white space. Your reader will feel overwhelmed when presented with large blocks of text without any spaces between the paragraphs. Bulleted text gives readers an opportunity to pause while scanning for the most important points in your letter. Shorter paragraphs (1-3 sentences) allow your audience time to fully comprehend the information without feeling the need to keep reading.

Mortgage Marketing Letter Tip #9: Conclude with a postscript (P.S.) – One of the most popular techniques used by letter writers for encouraging immediate action is through a postscript, that is, a “P.S.” Some studies have shown that many readers scan down the page to the P.S. before they read anything else. That means there’s a chance some of the most essential components to your letter won’t even get a glance.

So, whether your reader jumps to the last few lines of your letter or reads every word, you want to make sure your P.S. statement is convincing enough that your reader wants to take action. You may even want to restate your proposition in the P.S.

Additional ideas to consider in your mortgage marketing letter:

• Test your letter on a small group of people before mailing to your entire list.

• Make sure your letter is formatted so it meets postal specifications.

• Be honest. Readers know when you’re trying to trick them with false offers.

• Find a successful marketing letter and hand-write it word for word. As you do this more and more, your subconscious mind will begin remembering the effective techniques used by other authors.

• Spend some time testing teasers for your envelope.

• Come up with a reliable method for tracking your mailings (e.g., codes, phone numbers, etc.)

Made famous by the Chattanooga Choo-Choo dance, this Tennessee city is an attractive place for young couples to settle, purchase a home, and to start a family. A Chattanooga Mortgage provider can help you get started, here are some helpful tips to get you on your way.

1. Gather your paperwork. Yes, sooner or later you will be asked for more documentation than you thought possible. Lenders will want this material and some government agencies require the information too. Chief item needed include: the last three years of your state and federal income tax filings – lender will want to verify that you have the ability to repay what you borrowed; your pay stubs; personal and job references; your social security card; a picture i.d.; bank statements including checking and savings accounts; and any other paperwork required. Some Chattanooga mortgage companies may have different requirements; make sure you understand what they need in order to move the process along.

2. Select a lender. Search the internet and enter “Chattanooga Mortgage” into your search box. The results should list several good ones; visit their sites and read everything you can about the company. Contact at least three lenders and let them compete against each other.

3. Contact a mover. If you cannot move it yourself, contact several moving companies to get competing estimates. Do not delay as rates go up closer to your move. Plan in advance and avoid paying extra fees.

4. Contact utility companies. Phone, cable, gas, electric, trash, sewer, and the like are some of the providers you need to contact before you move in. Don’t delay; some will also want a deposit too.

Once your moving date has been set, contact the post office to have your mail forwarded to the new address. Ask them to forward all of your magazines too.

Your attorney and realtor will instruct you along the way as far as what is expected next. A home inspection and a title search must be conducted early on and your Chattanooga Mortgage lender will present to you detailed information about loan rates, closing costs, taxes, fees, and more. At this point in the process you are nearly done and it is only a matter of time before your big move.

Should you have any questions, your Chattanooga mortgage provider, realtor, and attorney are all there to help. Before you know it the closing date will arrive, the movers will magically appear, and you will be snug in your new home.

Commercial mortgages are loans taken for the purchase of property that is, only intended for business or commercial use. Properties like shopping centers, industrial centers, offices, golf courses, resorts, hotels, parking garages, and car washes are termed as commercial properties. In Colorado, the best way to apply for a mortgage for a commercial property is to contact a commercial mortgage broker.

Colorado commercial mortgage brokers are usually a part of the Colorado Association of Mortgage Brokers (CAMB). It is a non-profit organization, aimed at providing assistance to professionals specializing in real estate. Commercial mortgage brokers are provided with training programs to keep them up-to-date with the latest trends and practices through this organization. The Colorado Association of Mortgage Brokers is also a part of the National Association of Mortgage Brokers.

It is necessary to get commercial property financed, at a competitive rate as it directly affects the finances of the organization. Commercial brokers come into the picture once a company decides on the location and price of a property. Usually, organizations opt for a ‘commercial interest only’ loan, as it provides them with an option of paying, only the interest for the first few years of the loan. A commercial loan can be for period of anywhere between five to thirty years. The rate for these loans can be either fixed or adjustable.

To become a commercial mortgage broker it is necessary to get a license. The appropriate regulatory bodies that are set in place regulate all the brokers. A regulator body will ensure that the broker complies with the laws. However, to know how a broker treats the customers and if the services provided by the broker are satisfactory, it is advisable to get an opinion from other similar business companies.

Commercial mortgage brokers advice the companies in deciding the best loan option. They help their clients understand the whole method of writing a proper loan application, processing the loan file and closing the loan. This helps the companies save a considerable amount of time and money.