When you want to start your new career as an online venture capitalist, you should always be keenly aware that there are classic mistakes that most newcomers all do. These are actually common in offline businesses as well, it's just that many times people have more realistic expectations for an offline businesses. Especially when you want to raise money for your online businesses, there are several things to consider. Many potential entrepreneurs believe in self created myths about starting their own business, and end up banging their heads against the wall for that reason. Here are the top 5 Internet business myths:
Myth 1) A great idea is all you need to get rich.
In reality though a brilliant idea is never enough to start a successful businesses. Think about McDonald's Could you make a better burger than McDonald's? Most people would say they probably could or they know someone who does. Now ask yourself, could you replicate that process, think it out and teach it to thousands of branches across the world in a profit maximising way? Not likely, which is why McDonald's is a huge success and you should stick to your grill. Having a great idea is only the beginning, it is just as important to know how to run a business.
Myth 2) Someone will copy your idea if you don't patent it.
In reality no one will be bothered by stealing your idea, until they have seen it make money. And then it will probably be too late for them to get in on the product. Patents have their place though, it makes it easier to sell an idea to investors if a patent is obtained. But otherwise you are better of putting that time and money into your business. Many aspects of Internet business are cover by international copyright.
Myth 3) What you think of something is the truth.
Lose the ego if you want to be successful in businesses. It is easier to find a market and sell something, than to create a market yourself. Always keep your eyes on the ball, which means: Focus on what the customer wants, not what you want.
Myth 4) Financial Models are useless.
It is true that financial models are not something you can base your future earnings on but they do serve a purpose for taking to the bank or investors if you want to borrow money. A good financial model should be able to point out difficulties before your project goes live and so save you and the investors a lot of money.
Myth 5) Focus on delivering a quality product and you will get customers.
It is true that if you have a good product then you will also find some customers, but who is to say how many? The competition in most niches areas is fierce and without marketing you will find it hard to get enough sales for your business to become truly viable. It pays to be creative here, think about offline marketing for your online business. Get cheap flyer printing services and spread the word to as many people as you can whenever you can.
Read More .....
Free Web 2.0 Marketing Analytics Tools
• Free tools to find high traffic keywords on major search engines
• Free tools to track what people are saying about your product or company online.
• Free tools to obtain detailed traffic measurement of other websites
Today's consumers don't just rely on traditional media for information; increasingly, they are turning to the Internet for help them to make their purchase and decisions. With forums, product websites and blogs, the Internet is a savvy consumer's playground.
The online advertising landscape however is extremely fragmented with hundred of millions of websites. In order make informed decisions regarding audience profiling and targeting, web analytics has become an indispensable tool.
These resources below will help you learn more about your audience, measure your campaign's success, keep abreast of the latest market trends and new platforms to reach out to your target audience. In addition, it helps you make a more informed decision on media placement. This is especially important as media owners may not always have the same aligned interest as you in disclosing their traffic details.
Use these tools to produce your winning combination:
• Google Traffic Estimator is great for quick traffic estimates for new keywords, clicks and spending.
• Utilize Google Web Optimizer to test for the components that make up the best website.
• Use a good site analytics package like Google Analytics, Omniture or Webtrends.
• BLVD Status is an easy yet comprehensive analytics tool that tracks your referrals and conversions with live stats, RSS and form conversion tracking and outgoing link conversions, even from “Digg This” and social media sites.
• CrazyEgg, Google Analytics will tell you what links your visitors click…but Crazy Egg shows you which parts of your pages your visitors click on. There’s a subtle difference: Crazy Egg shows you clicks even if they weren’t on a link.
Analysis and Research
• Keep in the loop with Google Alerts to receive email updates whenever there are new Google results for the keywords or topic you choose.
• Get your Net Promoter Score (NPS) as a simple yet effective gauge of customer loyalty that sorts them out into either promoters, passives or detractors, and from there you know how your company is faring.
Market News
• Search Engine Land – my preferred source for the latest and most comprehensive search engine technology news and trends in the market.
Social Media Marketing
• Social media sites are visited by millions of young people every day, and this is an excellent platform to connect with them, right where they spend a lot of their time; be it uploading a video ad campaign to Youtube or being part of the Facebook or Twitter (the next big thing after Facebook) or MySpace network, which can give you a lot of information about your target customers.
Advertising
• Use sites like Quantcast and Compete.com to obtain detailed measurements of your audience reach, composition and traffic, then peg it against your competitors’ to see where your company stands.
• In my opinion, affiliate marketing is an excellent way to gain exposure and new leads by using a partner website or ad to drive traffic to your website in return for a small commission.
Read More .....
• Free tools to track what people are saying about your product or company online.
• Free tools to obtain detailed traffic measurement of other websites
Today's consumers don't just rely on traditional media for information; increasingly, they are turning to the Internet for help them to make their purchase and decisions. With forums, product websites and blogs, the Internet is a savvy consumer's playground.
The online advertising landscape however is extremely fragmented with hundred of millions of websites. In order make informed decisions regarding audience profiling and targeting, web analytics has become an indispensable tool.
These resources below will help you learn more about your audience, measure your campaign's success, keep abreast of the latest market trends and new platforms to reach out to your target audience. In addition, it helps you make a more informed decision on media placement. This is especially important as media owners may not always have the same aligned interest as you in disclosing their traffic details.
Use these tools to produce your winning combination:
• Google Traffic Estimator is great for quick traffic estimates for new keywords, clicks and spending.
• Utilize Google Web Optimizer to test for the components that make up the best website.
• Use a good site analytics package like Google Analytics, Omniture or Webtrends.
• BLVD Status is an easy yet comprehensive analytics tool that tracks your referrals and conversions with live stats, RSS and form conversion tracking and outgoing link conversions, even from “Digg This” and social media sites.
• CrazyEgg, Google Analytics will tell you what links your visitors click…but Crazy Egg shows you which parts of your pages your visitors click on. There’s a subtle difference: Crazy Egg shows you clicks even if they weren’t on a link.
Analysis and Research
• Keep in the loop with Google Alerts to receive email updates whenever there are new Google results for the keywords or topic you choose.
• Get your Net Promoter Score (NPS) as a simple yet effective gauge of customer loyalty that sorts them out into either promoters, passives or detractors, and from there you know how your company is faring.
Market News
• Search Engine Land – my preferred source for the latest and most comprehensive search engine technology news and trends in the market.
Social Media Marketing
• Social media sites are visited by millions of young people every day, and this is an excellent platform to connect with them, right where they spend a lot of their time; be it uploading a video ad campaign to Youtube or being part of the Facebook or Twitter (the next big thing after Facebook) or MySpace network, which can give you a lot of information about your target customers.
Advertising
• Use sites like Quantcast and Compete.com to obtain detailed measurements of your audience reach, composition and traffic, then peg it against your competitors’ to see where your company stands.
• In my opinion, affiliate marketing is an excellent way to gain exposure and new leads by using a partner website or ad to drive traffic to your website in return for a small commission.
Read More .....
Top 5 Business Books to Read in 2009
Those who want to stay successful in business understand the need to stay updated and constantly push themselves in new directions. Every year there are new books on business and marketing published. Some of these offer great new perspectives, while others are just rehashes of older classics.
Sometimes older books can be just as valuable as new books. Just think of classics such as Dale Carnegie or Napoleon Hill. These books are timeless in that the advice they offer is about human interaction and human nature, which hasn't changed much for the last 10,000 years when we discount changes in technology. This year there are 5 books which are must reads for any serious business man or women:
1. Good to Great
Good to Great: Why Some Companies Make The Leap and Others Don't by Jim Collins is an impressive book on corporate culture, that is based on rigorous research of over 1400 companies and what made them successful or not. It includes learning from top CEO's of American businesses and other notable people from the business world. The learning taken from this book, through theory and examples, is that above technology and other external factors, a strong, disciplined corporate culture is the key to success.
2. Positioning:
The Battle for Your Mind: A marketing classic form 1981, which shook the world with its direct approach to sales and marketing. Now available in a new edition, this book describes why it is so important to position your brand in the consumers mind and how to do it.
3. The Tipping Point:
How Little Things Can Make a Big Difference by Malcolm Gladwell, discusses how events become trends and go onto global phenomena. A very eye opening book for all who want to get the word out. This book is particularly fascinating to read, considering the exponential growth in web 2.0 and social groups online. Gladwell argues that trends are created, not just random. It is about knowing exactly who to tell exactly what to.
4. The 7 Habits of Highly Effective People:
Another true classic from Stephen Coldwell deals with everything from raising your children to becoming successful in business, by incorporating 7 habits of success into your life. A bestseller for many years, this book is still as relevant now as it was when it was first published.
5. The World Is Flat 3.0:
A Brief History of the Twenty-first Century: Thomas Friedman could be called a futurist, that is he makes predictions of what is to come. In this book though he focuses more on what wonders have already happened and makes us reflect upon their significance. In that respect, he actually teaches understanding of the present to prepare for the future. The title of the book is a reference to globalization and breaking down political, economic and cultural barriers. A truly inspiring read on how we went from leaflet printing to spread the news of the world to online social groups that transcend borders, age and cultures. If we are to understand the future of globalization this is a great starting point. Read More .....
Sometimes older books can be just as valuable as new books. Just think of classics such as Dale Carnegie or Napoleon Hill. These books are timeless in that the advice they offer is about human interaction and human nature, which hasn't changed much for the last 10,000 years when we discount changes in technology. This year there are 5 books which are must reads for any serious business man or women:
1. Good to Great
Good to Great: Why Some Companies Make The Leap and Others Don't by Jim Collins is an impressive book on corporate culture, that is based on rigorous research of over 1400 companies and what made them successful or not. It includes learning from top CEO's of American businesses and other notable people from the business world. The learning taken from this book, through theory and examples, is that above technology and other external factors, a strong, disciplined corporate culture is the key to success.
2. Positioning:
The Battle for Your Mind: A marketing classic form 1981, which shook the world with its direct approach to sales and marketing. Now available in a new edition, this book describes why it is so important to position your brand in the consumers mind and how to do it.
3. The Tipping Point:
How Little Things Can Make a Big Difference by Malcolm Gladwell, discusses how events become trends and go onto global phenomena. A very eye opening book for all who want to get the word out. This book is particularly fascinating to read, considering the exponential growth in web 2.0 and social groups online. Gladwell argues that trends are created, not just random. It is about knowing exactly who to tell exactly what to.
4. The 7 Habits of Highly Effective People:
Another true classic from Stephen Coldwell deals with everything from raising your children to becoming successful in business, by incorporating 7 habits of success into your life. A bestseller for many years, this book is still as relevant now as it was when it was first published.
5. The World Is Flat 3.0:
A Brief History of the Twenty-first Century: Thomas Friedman could be called a futurist, that is he makes predictions of what is to come. In this book though he focuses more on what wonders have already happened and makes us reflect upon their significance. In that respect, he actually teaches understanding of the present to prepare for the future. The title of the book is a reference to globalization and breaking down political, economic and cultural barriers. A truly inspiring read on how we went from leaflet printing to spread the news of the world to online social groups that transcend borders, age and cultures. If we are to understand the future of globalization this is a great starting point. Read More .....
Marketing Strategy For Niche Marketing Success
Large companies provide minimal investments in a niche marketing strategy, if at all. Niche marketing success pertains mainly to smaller companies willing to establish meaningful relationships with their consumers. Bigger companies focus interest on generating immediate, large amounts of profit over small amounts of time. However, companies or organizations dedicated in a marketing strategy to develop smaller, more meaningful relationships increase their return investments for guaranteed profit over longer periods of time.
A Product or service marketing strategy requires obtaining specific information on the consumers in the targeted group for niche marketing success. Any company can find a niche to promote a product or service in. Just because you find a niche, doesn’t mean you’re guaranteed to gain their business. Members of the targeted group know their stuff. A sales representative doesn’t stand a chance in establishing niche marketing success if they don’t know how to ‘talk shop’ with members in the targeted group. Take some time to get to know the details about your niche and why they’re so passionate about a certain hobby or interest. First, do your research; then, form trust with members before developing a marketing strategy.
Part of a marketing strategy for niche marketing success needs to include a time period for establishing trust with prospective clients. This will be a period where your company isn’t trying to sell its products or services. Share the targeted groups interest by getting involved in their community. Most communities post through forums online or have weekly to monthly gathering in order to participate in their activity of interest. Start by showing up to events and getting to know your niche’s community. Get to know inner-circle conversation by identifying and using jargon. Obtain niche-marketing success through first establishing your right of passage in the community. Be patient with this process. It could take anywhere from 2 to 3 months to fully establish yourself in the community.
Once you’ve established personal acceptance within the group, you’ll need to focus on a marketing strategy for niche marketing success. Plan out how you’re going to establish great service throughout the sale. Never make a sale within the niche and discontinue your interest in their satisfaction. Niche marketing success depends on word-of-mouth references and repeat buyers.
A marketing strategy for niche marketing success takes time to develop and establish. You will need superior customer service representatives, trusting buyer to seller relationships and solid, dependable products or services. Never skimp on quality for quantity when working within a niche.
Along the way, it will seem like a lot of work without any immediate payoffs. However, this is where smaller, more personalized organizations make better profit over large corporate businesses. A marketing strategy for niche marketing success gathers lifetime buyers and provides company security for many years. Corporate business last and thrive on their next successful marketing campaign and only guarantee business until the popular product loses public interest. Secure, meaningful and lifelong success thrives on niche marketing success and relationships developed within your marketing strategy make the company’s existence stand for a greater purpose. Read More .....
A Product or service marketing strategy requires obtaining specific information on the consumers in the targeted group for niche marketing success. Any company can find a niche to promote a product or service in. Just because you find a niche, doesn’t mean you’re guaranteed to gain their business. Members of the targeted group know their stuff. A sales representative doesn’t stand a chance in establishing niche marketing success if they don’t know how to ‘talk shop’ with members in the targeted group. Take some time to get to know the details about your niche and why they’re so passionate about a certain hobby or interest. First, do your research; then, form trust with members before developing a marketing strategy.
Part of a marketing strategy for niche marketing success needs to include a time period for establishing trust with prospective clients. This will be a period where your company isn’t trying to sell its products or services. Share the targeted groups interest by getting involved in their community. Most communities post through forums online or have weekly to monthly gathering in order to participate in their activity of interest. Start by showing up to events and getting to know your niche’s community. Get to know inner-circle conversation by identifying and using jargon. Obtain niche-marketing success through first establishing your right of passage in the community. Be patient with this process. It could take anywhere from 2 to 3 months to fully establish yourself in the community.
Once you’ve established personal acceptance within the group, you’ll need to focus on a marketing strategy for niche marketing success. Plan out how you’re going to establish great service throughout the sale. Never make a sale within the niche and discontinue your interest in their satisfaction. Niche marketing success depends on word-of-mouth references and repeat buyers.
A marketing strategy for niche marketing success takes time to develop and establish. You will need superior customer service representatives, trusting buyer to seller relationships and solid, dependable products or services. Never skimp on quality for quantity when working within a niche.
Along the way, it will seem like a lot of work without any immediate payoffs. However, this is where smaller, more personalized organizations make better profit over large corporate businesses. A marketing strategy for niche marketing success gathers lifetime buyers and provides company security for many years. Corporate business last and thrive on their next successful marketing campaign and only guarantee business until the popular product loses public interest. Secure, meaningful and lifelong success thrives on niche marketing success and relationships developed within your marketing strategy make the company’s existence stand for a greater purpose. Read More .....
Business Marketing And Web Marketing
Since the inception of the Internet about twenty years ago, business has developed an all new dimension to its marketing. This is very convenient and lucrative, considering that online users from all over the world make up a significant portion of the community that online business marketing targets. Today, most of the people in the world interact and shop online because of its ease and quick turn-around. Internet marketing takes advantage of this reality to make everyone’s lives better.
Business marketing and web marketing are the two main forms of online business approaches. When it comes to business marketing, advertisements and promotional emails are the two strategies that individual businesses use attract online customers and increase web traffic to their sites. The greater the traffic, the better the business.
Web marketing, on the other hand, utilizes search engines to draw in online customers who are searching for particular services. These search engines provide customers with a constant means of availability and support through specialty cataloging where lists of multiple sites offering similar services are created via key word assimilation. In this way, customers seeking those particular services have at their disposal a plethora of valuable resources, and, as is the case with business marketing, an influx of website traffic is increased on a daily basis.
Websites are virtual billboards posted along the cyber highway of the Internet for all to see. These billboards lead customers easily in the right direction so that traffic remains consistent at all times. That’s why billboards are intended to focus on attracting customers without much of an effort, so they really don’t need to be found or are difficult for online shoppers to see. Free membership is a common feature with many online businesses so that customers find items easily and without the aggravation of “red tape” or unnecessary fees. Again, the more convenient and easy (not to mention less expensive) shopping is for customers online, the better the business.
However, because of the ongoing competitiveness, virtually thousands of sites exist offering similar products and services. The key, then, is to have a site that will stand out among this crowd and draw in the shoppers. Specific marketing is one way to do this, as the particular is more attractive over the general because the latter tends to have a mission that is not well-focused. Many of those seeking services are looking for the particular, so they see specific marketing as preferable to their needs. Pay-per-click advertising allows website payment based on the number of searchers who click on a site’s banner or link.
Affiliate marketing is another common strategy, not to mention one of the oldest methods used online. This concept is based on the “buddy” system whereby business websites are associated with others sites in the same or a similar field of service. Business websites pay each affiliate a certain percentage or amount for each click rerouted to them. For this reason, affiliate links listed on any webpage should be tightly related to enhance search engine applicability. Read More .....
Business marketing and web marketing are the two main forms of online business approaches. When it comes to business marketing, advertisements and promotional emails are the two strategies that individual businesses use attract online customers and increase web traffic to their sites. The greater the traffic, the better the business.
Web marketing, on the other hand, utilizes search engines to draw in online customers who are searching for particular services. These search engines provide customers with a constant means of availability and support through specialty cataloging where lists of multiple sites offering similar services are created via key word assimilation. In this way, customers seeking those particular services have at their disposal a plethora of valuable resources, and, as is the case with business marketing, an influx of website traffic is increased on a daily basis.
Websites are virtual billboards posted along the cyber highway of the Internet for all to see. These billboards lead customers easily in the right direction so that traffic remains consistent at all times. That’s why billboards are intended to focus on attracting customers without much of an effort, so they really don’t need to be found or are difficult for online shoppers to see. Free membership is a common feature with many online businesses so that customers find items easily and without the aggravation of “red tape” or unnecessary fees. Again, the more convenient and easy (not to mention less expensive) shopping is for customers online, the better the business.
However, because of the ongoing competitiveness, virtually thousands of sites exist offering similar products and services. The key, then, is to have a site that will stand out among this crowd and draw in the shoppers. Specific marketing is one way to do this, as the particular is more attractive over the general because the latter tends to have a mission that is not well-focused. Many of those seeking services are looking for the particular, so they see specific marketing as preferable to their needs. Pay-per-click advertising allows website payment based on the number of searchers who click on a site’s banner or link.
Affiliate marketing is another common strategy, not to mention one of the oldest methods used online. This concept is based on the “buddy” system whereby business websites are associated with others sites in the same or a similar field of service. Business websites pay each affiliate a certain percentage or amount for each click rerouted to them. For this reason, affiliate links listed on any webpage should be tightly related to enhance search engine applicability. Read More .....
Interest Credit
The purpose of the Guaranteed Rural Housing Program is to increase the supply of affordable rural rental housing, through the use of loan guarantees that encourage partnership between RHS, private lenders and public agencies.
There has never been a better time to consolidate your credit cards and get a far better interest rate. There are many offers out there but they all offer pretty much the same thing. The only thing that varies is the APR the 0% balance transfer period and possibly reward points for using the card.
You may have seen many advertisements for low interest credit on the TV or newspaper. Many of these offers require a person to have good credit. Sometimes low interest credit card advertisements may only state the introductory rate.
The interest rate stated in the note will be fixed for the term of the loan.? The interest rate is a function of the market for loans backed by the RHS Guarantee and will be fixed at the date the loan is committed to by an investor.
Low interest cards may not have many additional offers and rewards on purchases. Low interest credit cards are best for those people who normally carry over a balance each month.
For minimum loan size of S$500,000, SmartMortgage interest credit is currently capped at 80% of the interest on the SmartMortgage facility for the relevant month. The Bank reserves the right to adjust the SmartMortgage Current Account interest rate.
When searching for low interest credit cards, it is also important to be aware of the fees associated with using the credit card. These fees can include annual fees, transfer fees, approval fees, etc.
In order to obtain a RHS Loan Guarantee, all potential borrowers must apply through an RHS approved lender for the loan guarantee obligation.? Every year RHS issues a NOFA requesting proposals for loan guarantees for specific projects.? The NOFA?s are scored and funding is obligated based on those projects that meet the necessary requirements of the NOFA.
Low interest credit is also beneficial to financing your home, automobile and similar items. To get low interest car loans, it is beneficial to search online. Low interest home equity loans can substantially decrease your monthly payments.
If you have run up your debt to an unmanageable amount, you can seek debt reduction services to bring it under control. One way to reduce your debt by lowering your interest rates is to seek debt consolidation. Debt consolidation allows you to pay off your loans through one low interest credit loan
A debt consolidation service can help you find low interest credit. Debt consolidation usually allows you to get a secured loan to finance your unsecured loans. A secured loan is a low interest credit loan since it is backed by collateral.
Re-mortgaging includes finding low interest credit loans to substitute for your current mortgage.
The average annual interest rates charged on most variable credit cards rose slightly last week, according to Bankrate.com, although cash-back cards saw rates dip. Read More .....
There has never been a better time to consolidate your credit cards and get a far better interest rate. There are many offers out there but they all offer pretty much the same thing. The only thing that varies is the APR the 0% balance transfer period and possibly reward points for using the card.
You may have seen many advertisements for low interest credit on the TV or newspaper. Many of these offers require a person to have good credit. Sometimes low interest credit card advertisements may only state the introductory rate.
The interest rate stated in the note will be fixed for the term of the loan.? The interest rate is a function of the market for loans backed by the RHS Guarantee and will be fixed at the date the loan is committed to by an investor.
Low interest cards may not have many additional offers and rewards on purchases. Low interest credit cards are best for those people who normally carry over a balance each month.
For minimum loan size of S$500,000, SmartMortgage interest credit is currently capped at 80% of the interest on the SmartMortgage facility for the relevant month. The Bank reserves the right to adjust the SmartMortgage Current Account interest rate.
When searching for low interest credit cards, it is also important to be aware of the fees associated with using the credit card. These fees can include annual fees, transfer fees, approval fees, etc.
In order to obtain a RHS Loan Guarantee, all potential borrowers must apply through an RHS approved lender for the loan guarantee obligation.? Every year RHS issues a NOFA requesting proposals for loan guarantees for specific projects.? The NOFA?s are scored and funding is obligated based on those projects that meet the necessary requirements of the NOFA.
Low interest credit is also beneficial to financing your home, automobile and similar items. To get low interest car loans, it is beneficial to search online. Low interest home equity loans can substantially decrease your monthly payments.
If you have run up your debt to an unmanageable amount, you can seek debt reduction services to bring it under control. One way to reduce your debt by lowering your interest rates is to seek debt consolidation. Debt consolidation allows you to pay off your loans through one low interest credit loan
A debt consolidation service can help you find low interest credit. Debt consolidation usually allows you to get a secured loan to finance your unsecured loans. A secured loan is a low interest credit loan since it is backed by collateral.
Re-mortgaging includes finding low interest credit loans to substitute for your current mortgage.
The average annual interest rates charged on most variable credit cards rose slightly last week, according to Bankrate.com, although cash-back cards saw rates dip. Read More .....
Mortgages
March 4 (Bloomberg) -- More than 8.3 million U.S. mortgage holders owed more on their loans in the fourth quarter than their property was worth as the recession cut home values by $2.4 trillion last year, First American CoreLogic said.
Conventional 30-year mortgages fell out of favor last year as home buyers seeking to reduce their monthly payments opted for adjustable-rate and interest-only mortgages. During the second half of 2004, adjustable-rate and interest-only loans accounted for 63% of mortgage originations, according to the Mortgage Bankers Association.
Reverse mortgages allow people who are age 62 and older to borrow against their home equity, and then get paid in regular installments by the mortgage company. Now that higher limits have been authorized for reverse mortgages, this good retirement resource just got a whole lot better.
"The accelerating share of negative equity, combined with deteriorating economic conditions, means that mortgage risk will continue to increase until home prices and the economy begin to stabilize," says Mark Fleming, chief economist for First American CoreLogic.
Funny, but we don?t recall hearing about the sufferings of these same mortgage borrowers when their housing values were rocketing upwards.
The reason: Rates for 30-year mortgages are at a 14-month low. Last week, the average 30-year fixed-rate mortgage was 5.56%, the lowest since April 1, 2004, according to mortgage giant Freddie Mac. The decline has narrowed the difference between long- and short-term mortgage rates.
Declining home values and overall economic woes continue to drive up mortgage delinquencies. Consumer credit rating firm TransUnion reports 4.6% of mortgage holders were at least 60 days past due on their loans in the last quarter of 2008, up from 3% the same period a year earlier.
"We thought that the 8% interest loans would reset to about 12%," said Alan White, a law professor at Valparaiso University who has studied the lending industry's mortgage modification efforts, "but they only went to 9% or less.
Awareness about reverse mortgages has increased dramatically in recent times. The NRMLA (National Reverse Mortgage Lenders Association) predicts higher growth of HECMs in the coming months, because of new changes to the HECM program. These changes are higher loan limits, co-op eligibility, stricter consumer protections, and home purchase component.
The difficulty is that the mortgages have been sliced up and sold so many times, they are extremely hard to value. And investors are so worried about a continuing fall in housing prices, there's no market.
Stabilizing house prices will likely improve consumer confidence substantially. Increases in house prices relative to where they would have gone with higher mortgage rates would also provide a housing wealth effect--that is, higher annual increases in spending as consumers feel richer--on consumption of as much as $76 billion to $113 billion each year.
Insured by the Federal Housing Administration (FHA), these loans are often referred to as government mortgages. They require lower down payments and accept higher debt ratios than conventional mortgages, so they're good for those buyers who otherwise might not qualify.
More than a tenth of American households with home mortgages are overdue on payments or in foreclosure, according to a new survey.
Read More .....
Conventional 30-year mortgages fell out of favor last year as home buyers seeking to reduce their monthly payments opted for adjustable-rate and interest-only mortgages. During the second half of 2004, adjustable-rate and interest-only loans accounted for 63% of mortgage originations, according to the Mortgage Bankers Association.
Reverse mortgages allow people who are age 62 and older to borrow against their home equity, and then get paid in regular installments by the mortgage company. Now that higher limits have been authorized for reverse mortgages, this good retirement resource just got a whole lot better.
"The accelerating share of negative equity, combined with deteriorating economic conditions, means that mortgage risk will continue to increase until home prices and the economy begin to stabilize," says Mark Fleming, chief economist for First American CoreLogic.
Funny, but we don?t recall hearing about the sufferings of these same mortgage borrowers when their housing values were rocketing upwards.
The reason: Rates for 30-year mortgages are at a 14-month low. Last week, the average 30-year fixed-rate mortgage was 5.56%, the lowest since April 1, 2004, according to mortgage giant Freddie Mac. The decline has narrowed the difference between long- and short-term mortgage rates.
Declining home values and overall economic woes continue to drive up mortgage delinquencies. Consumer credit rating firm TransUnion reports 4.6% of mortgage holders were at least 60 days past due on their loans in the last quarter of 2008, up from 3% the same period a year earlier.
"We thought that the 8% interest loans would reset to about 12%," said Alan White, a law professor at Valparaiso University who has studied the lending industry's mortgage modification efforts, "but they only went to 9% or less.
Awareness about reverse mortgages has increased dramatically in recent times. The NRMLA (National Reverse Mortgage Lenders Association) predicts higher growth of HECMs in the coming months, because of new changes to the HECM program. These changes are higher loan limits, co-op eligibility, stricter consumer protections, and home purchase component.
The difficulty is that the mortgages have been sliced up and sold so many times, they are extremely hard to value. And investors are so worried about a continuing fall in housing prices, there's no market.
Stabilizing house prices will likely improve consumer confidence substantially. Increases in house prices relative to where they would have gone with higher mortgage rates would also provide a housing wealth effect--that is, higher annual increases in spending as consumers feel richer--on consumption of as much as $76 billion to $113 billion each year.
Insured by the Federal Housing Administration (FHA), these loans are often referred to as government mortgages. They require lower down payments and accept higher debt ratios than conventional mortgages, so they're good for those buyers who otherwise might not qualify.
More than a tenth of American households with home mortgages are overdue on payments or in foreclosure, according to a new survey.
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