How to Build a Real Estate Investment Portfolio with Minimum Risk

Posted on April 23, 2012 by Michael Roche

 

Be Patient - Time Is On Your Side

The percentages vary from one report to another but there is no question that a very high percentage of multi-millionaires attribute their financial success to real estate investments. That doesn’t address how much money they started with or what connections they had to get started. After all, Donald Trump didn’t start with zero assets. Most of us will never create a real estate empire and are not ready to mitigate the risk in doing so but are dedicated to embarking on a conservative real estate investment approach to building a retirement nest egg.

The television screen is proliferated with Info-commercials promoting the investment property buy to sell (flipping) concept of attaining wealth. Investors who buy low to sell high take substantial risk but the rewards can be significant if all goes well. Residential real estate has lower or more manageable risk factors than commercial investments and requires far less knowledge and experience. The downside of flipping is the intangible expense associated with repair costs, extended marketing time and other unforeseen factors. Properties that fit into the “handyman special” category are frequently not so special when repairs are underestimated or unforeseen problems surface. This is an investment that can provide a sizable return on the invested dollar but that doesn’t happen as frequently as new investors are led to believe. The opposite is far more prevalent.   

Many successful real estate investors started by buying their first home and found that when it was time to move up to a larger or more comfortable home they could rent their existing home for more than their monthly expense. The key factor is the financial capability of handling the expense of purchasing the new property without compromising the equity gained in the existing property. Mortgage lender’s qualifying criteria requires that 25% of the rent be allotted to vacancy and maintenance factors. Whereas in most cases, expenses are not likely to be that high, this is an important consideration. Some houses, town homes or condominiums lend themselves to becoming rental properties and others do not. For example, older houses, charming as they might be are likely to require above average maintenance expense. Condominiums regardless of association fees can make excellent rental properties because those fees normally cover insurance, all outside maintenance and sometimes certain utilities. Investment experts frequently recommend renting properties slightly below market. Twenty five dollars per month is a lot of money to many renters and just a couple of months of vacancy can erase gains from higher rents.

The second move up frequently falls into the “dream home” category and it may be more difficult to keep the current home as a rental property depending upon price range, equity requirements for down payment and the expense to improve or furnish the property into the dream home echelon.

Many investors buy second homes with the idea of converting them to rental properties at some point in time. Seasonal properties in highly desirable vacation locations with close proximity to beaches, golf or skiing can be excellent investments. A few months of rent over the season can cover expenses for an entire year leaving the property available for personal use during off season months. The complexity with seasonal rental is that the properties must be furnished, well maintained and usually need to be placed in control of a management company. Astute investors are aware that those who live and work in resort areas expect to pay comparatively higher rents than in less exciting locations and may opt for a local yearly tenant; a less risky option. Ten minutes from the beach is a feature that commands higher rents even for many local residents.

If the long term goal is to create financial independence for the retirement years the residential real estate investment game is a relatively simple proposition but there are some basic rules.

  • Keep your eyes on the prize. Be patient and focus on the long range plan. Building equity in your home and just two or three rental properties over twenty plus years can set you free financially.
  • Don’t take a second mortgage or cash out refinance your real estate even to buy more properties. Compromising one good investment to create another is seldom a good plan.
  • Know your marketplace or thoroughly research markets that you are unfamiliar with. Be careful of the “deal that is too good to be true”. It usually is but conduct your research. Unless the seller is a rich relative that just wants to cut you a deal, there is usually a very good reason for an under priced property.
  • The real estate market is constantly changing. Watch for opportunities in every economic environment. Don’t procrastinate or waver when instincts say the deal is right.
  • Make sure your personal and professional life is in order. Divorce and career set backs are the major causes of an investment plan that falls short.
  • And most of all do not stretch your financial ability for the purpose of taking advantage of an opportunity. Rainey days occur in almost everyone’s life and like any investment, staying power is critical to staying the course.

Over time, it does not take exceptional income or wealth to build a substantial real estate portfolio that will make the retirement years very comfortable. It does take a stable source of income, a stable personal environment and a commitment to stay the path. The conservative or low risk approach not only provides peace of mind but allows for small mistakes to be made without compromising the ultimate goal.

 

The incredible Automatic Rate Cut Mortgage (ARC) endorsed by this site, invites applications for investment and second home mortgages. Please watch the video and visit http://arc-mortgage.com. Never pay the cost of a refinance again!

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Financing a Second Home, Mortgage Lenders Make the Rules

Posted on April 4, 2012 by Michael Roche

 

I Promise! This Is A Second Home, Not A Rental Property

Actually FNMA and FHLMC make the rules. The mortgage lenders monitor compliance to insure that the mortgages they make are salable in the secondary market. Any residential real estate that is not the owner’s principal residence is classified as either a second home or an investment property in the real estate world.

The difference in interest rate and qualifying criteria is substantial. Whereas, second home mortgages normally require a small add on to the closing fees above a primary residence mortgage, investor loans require an interest rate premium of .5 to .75% and even more depending upon the size of the down payment. The one qualifying advantage an investment property loan bestows is that the projected rental income (minus a 25% vacancy and maintenance factor) can be used as income to offset the mortgage payment. The second home mortgage requires that the applicant qualify for the entire mortgage payment in addition to the mortgage on the primary residence as well as any other monthly debt.

So what is a second home according to the lender? To begin with, the property must be located a reasonable distance from the borrower’s principal residence. Underwriters have some discretion with this issue but normally require that the property be located 50 to 100 miles from the primary residence and require the borrowers justify the purchase of the property as a second home. The purpose of this annoyance is to insure that the intent is to occupy the property on a frequent basis, not simply to avoid investment property interest rates. Buyers do not normally purchase investment real estate located a substantial distance from home.

This does not preclude the borrower from renting the property to others but there are rules as to the terms. The rules state that the borrower must have control of the property; meaning that the property will not be listed with a management company and the borrower will not execute a rental agreement. The premise for this requirement is that statistics indicate that owner occupied properties are better maintained; therefore reducing risk to the lender. If the owner is occupying the property for a portion of each year, theoretically there is less chance that the property will deteriorate to the point where it loses value.

These rules are nebulous at best. There does not seem to be any practical way to enforce them subsequent to loan closing. If circumstances promoting the purchase of a primary residence change and the owner is either forced or elects to convert it to a rental property, the lender has no recourse against the borrower. There is a direct correlation with the second home purchase. It all comes down to the intent at the time of loan closing. Many properties purchased as second homes subsequently become rental properties.

There are circumstances where a purchase does not fit perfectly into the second home category but meets the underwriting criteria. Parents frequently purchase real estate to provide housing for their children to occupy while they are attending college. This can be a practical alternative to paying rent and hotel expense during their visits. While this scenario is not exactly the objective of second home financing, it does fit the underwriting parameters. Interestingly, this property will not likely be a second home forever. When the education is completed or discontinued, it is likely to become an investment property but purchased at far less expense to the buyer.

The incredible Automatic Rate Cut Mortgage (ARC) endorsed by this site, invites applications for second home mortgages. Please watch the video and visit http://arc-mortgage.com

Michael Roche is a National Outreach Coordinator for the Community Assistance Program. Our prescription drug discount card saves substantial dollars on all prescription drugs. “My wife was turned down on her migraine medicine by Medicare. the cost of the prescription was $130.00 but with the drug card it was $19.00.” This is an extreme discount occurance but it is real. Visit http:/usarx.org for more info. Michael also represents a diabetes supplies program through The Community Assistance Program that provides 50 to 70% discounts on diabetic supplies. Call 888-983-7829 code 1194 for information from a live person or visit http://capdiabeticprogram.com/1194. ”

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Thirty Year Verses Fifteen Year Mortgage – Which Amortization Is For Your Home?

Posted on March 22, 2012 by Michael Roche

 

Fifteen Years Is Not Long Over A Lifetime

Amortization is defined as the monthly payment including principal and interest required to pay off a loan in a specific period of time. When choosing   a home mortgage, it is obvious that the required monthly payment will be higher to pay off a loan in fifteen years than it will be over thirty years but there are other considerations.

Many of the standard fixed rate mortgage programs offer long term amortization up to forty years and as short as 10 years on conventional mortgages. By far the most popular options with consumers are the thirty and fifteen amortized mortgages. Fifteen year loans offer the obvious advantages of an early pay off and a substantially reduced amount of interest paid out during the term of the loan. The additional advantage is the interest rate is normally somewhat lower with a fifteen year mortgage. The variance is generally ¼ percent to ½ percent depending upon current market conditions. Forty year amortization seems like a good idea for keeping the payment low but in execution it does not provide much of a payment advantage over the thirty year. The objective is additionally compromised because the interest rate can be slightly higher than the thirty year mortgage, negating some of the monthly payment savings. Shorter payment terms such as twenty-five and twenty years do not normally provide an interest rate advantage over the thirty year term rendering them “functionally obsolete” although there may be exceptions based on the consumer’s commitment to a long term plan.

Fifteen year amortized mortgages have great advantages over thirty year terms; shorter term pay off, lower interest rate and rapid equity build up. There is one glaring problem with them as an option for most home buyers. Because of the shorter term, the monthly payment is significantly higher than that of the thirty year amortization; so much so that the fifteen year payment is out of reach for most home buyers. The fifteen year loan is best suited for those with upward employment mobility who are buying well below their means or those refinancing a home with substantial equity or significant cash reserves.

Consideration should be given to possibility of unforeseen financial setbacks causing the monthly payment on the fifteen year mortgage to become a serious burden. In such events, the only recourse is an expensive refinance to a thirty year amortized mortgage which only works if the borrower’s qualifications have not been compromised by the negative events. If the objective of the fifteen year term is to achieve an early pay off or to build equity at a faster rate, there are other alternatives. Standard mortgages today have no prepayment penalty. In other words, any payment in addition to the required monthly payment is allocated to the principal loan balance. The result is an early payoff and lower amount of interest paid over the life of the loan. Many home buyers make their mortgage payment twice each month. For example one half of the mortgage payment is paid before it is due on the fifteenth of the preceding month and the other half on the first of the month when the entire payment is due reduces the pay off term from thirty years to twenty-two years. The mortgagee is not paying more, just making half of the payment early. Interest is only charged on the mortgage balance so in effect paying early reduces the interest accrual; therefore, shorting the pay off term. In addition, one supplementary mortgage payment per year (perhaps at tax refund time) further reduces the amortization to eighteen years. Most loan servicers will readily accommodate this arrangement. The effect of this strategy is that it can accomplish nearly the same equity and pay off result as the fifteen year amortized mortgage without the high monthly payment obligation.

The consensus is inflation and supply and demand factors work in contradiction to low property values and are likely to push property values higher in the near future. The fifteen year mortgage is a practical strategy for those in a stable living and employment environment. Fifteen years is not very long over a lifetime and the equity in a home with no mortgage can contribute to a very comfortable retirement.

For those financing or refinancing their home, consider the prospect of the most innovative mortgage program ever; the Automatic Rate Cut (ARC) mortgage. Available on all standard mortgage programs with either 30 year or 15 year terms the interest rate is automatically reduced when interest rates decline and “never goes back up.” There is no cost to the borrower so there is never a need for an expensive refinance to lower the interest rate. Please watch the video and visit http:/arc-mortgage.com for more information.

 

 

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Fannie Mae and Freddie Mac – Pervasive Impact on the Real Estate and Mortgage Industry

Posted on March 16, 2012 by Michael Roche
For Information On The Amazing ARC Mortgage CLICK HERE

From time to time the federal government “sponsors” enterprises.  Such an entity is appropriately called a “Government-Sponsored Enterprise”. There are a substantial number of these types of entities.  Perhaps none has had greater impact on the social fabric of American society than two mortgage related Government-Sponsored Enterprises, the Federal National Mortgage Association (FNMA), and the Federal Home Loan Mortgage Corporation (FHLMC).  Each of these organizations has a homespun nickname, which are loosely derived from their acronyms.  In the case of FNMA, the nickname is Fannie Mae.  The nickname for FHLMC is more abstract, since it is derived from the “Federal” and “MC” in its acronym, and is referred to as Freddie Mac.

FNMA, or Fannie Mae, was created during the Roosevelt era in 1938 to combat the effects of the “Great Depression”, and was privatized in 1968.  FHLMC, or Freddie Mac, was created by Congressional action in 1970 to compete with Fannie Mae.  Each of these corporations is publicly traded, and therefore, is owned by their shareholders.  Their special status, however, permits them to enjoy very substantial advantages over any other publicly traded company. Even though investment in either of them is not government secured, investor confidence is very high because of the quasi-government association.

Although both Fannie Mae and Freddie Mac have been disparaged in recent years due to their role in the real estate market meltdown, they are still and will continue to be the dominate influence in the mortgage industry. For decades their mortgage market platforms have provided Americans with uninterrupted access to funds for their real estate purchases. Their government sponsored status empowers them with ultimate creditability in international financial markets insuring that funds will be available for real estate purchases in the predictable future.

Each of these organizations plays a huge role in the home mortgage arena.  The influence is so significant because of the function they perform.  Simple in design, but complex in execution, their market functions  provide a conduit through which mortgages can be bought and sold.  Fannie Mae and Freddie Mac purchase home mortgages from banks and brokerage firms that provide loans directly to consumers.  Periodically, they bundle the loans that they have purchased into bond like securities and sell them to large institutional investors, such as pension funds, that are fond of stable investments that yield steady income.  The difference between the interest rate which the consumer pays, and the yield on the investment as it is sold, is how Fannie Mae and Freddie Mac make their money.  The profit from such transactions can be very significant, because the bundled sales often top $500,000,000 per transaction.

As an aside, a home buyer should not mistakenly conclude that the interest rate which they pay on a mortgage loan is based on these transactions alone.  The original lending institution has taken a profit, the loan officer has taken a profit, and eventually the entity that will service the loan throughout its life will take a profit. Together these are the micro costs related to loans, which ultimately the consumer must pay.  The macro costs will be discussed later in this article.

Together Fannie Mae and Freddie Mac form the most significant marketplace for mortgage loans.  Since they are stock companies, and thusly, have a responsibility to make money for their stockholders, obviously they would like to buy loans that provide a reasonable certainty of profitability. What that translates into at the ground floor is that the person to whom the mortgage loan has been made will make the loan payments on time and keep the loan to maturity.  Not surprisingly then, both Fannie Mae and Freddie Mac have set certain parameters for the types of loans they will buy.  These standards conform to statistics that they have compiled about the kinds of loans and the consumer profiles that will produce the desired outcomes, i.e., loans that are paid back on time and held to maturity.  What that translates to at the consumer level is that loans and home buyers that fit the profiles are the ones offered the very best loan terms and interest rates.  Those who do not “fit” are charged a premium for the loan.

Lenders, who typically are very concerned about the resale of any loan they approve, are heavily influenced by the Fannie Mae and Freddie Mac standards for two primary reasons.  First, they are the leading purchasers of home mortgages in the secondary market.  Second, the parameters that they set have been adopted into the technology of the loan approval process.  Consequently, the loan policies that are set by Fannie Mae and Freddie Mac become the de facto loan policies of the vast majority of lending institutions.

The underlying concepts on which these entities were created are good ones.  The federal public policy actions by Congress to create Fannie Mae and Freddie Mac serve the function of providing a means for lending institutions to sell the loans they have made and presumably use that money to approve more loans.  This sales function should make more home purchase opportunities available to more consumers, especially in low income areas.  Unfortunately, macro economics rears its head to influence the fluidity of the concepts.  Institutional investors that buy Fannie Mae and Freddie Mac bundled securities are influenced by the general economy as reflected in stock and bond markets performance.  Furthermore, the value of the bundled securities is influenced by borrower performance.  For example, if the ability of borrowers to repay their loans is affected by the performance of the general economy, i.e. if the number of foreclosures increases the value of the bundled securities become less attractive to investors.

Then there is the interrelationship between interest rates and home sales.  Lower interest rates stimulate home purchases, and vice versa, higher interest rates slow home purchases.  Each of these circumstances triggers the classic economic struggle between supply, demand and pricing, and the cyclical storm it creates.  In other words, when more homes are available in the marketplace, prices should drop and so should interest rates.

No matter what your conclusions may be, there is no question about the enormous influence Fannie Mae and Freddie Mac have on the terms and interest rate of the loan you obtain as a consumer.  Knowing the standards set by these organizations is of critical importance as you think about a home purchase.

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Subprime Mortgages – A Propagation of Fraud and Everyone Is Guilty

Posted on March 15, 2012 by Michael Roche
The Best Way To Rob A Bank Is To Own One

CBS News and specifically 60 Minutes has done a magnificent job of exposing fraud in the subprime mortgage markets. The recent concentration has been on two major banks that originated subprime mortgages; specifically Countrywide Mortgage and Citi Group. In a two part exposé “Prosecuting Wall Street”, interviews with Countrywide EVP, Eileen Foster and Citi Group SVP, chief underwriter, Richard Bowen revealed the magnitude of fraud associated with subprime lending. Incredibly, Mr. Bowen stated that he notified senior management of fraud on 60% of these mortgages and impropriety on up to 80%.

How could this happen? Easy, you create a mortgage program that is an open invitation for fraud and invite all of America to participate. Since 1938 the Federal National Mortgage Association (FMNA) has been the guardian of the “American Dream” of home ownership. Over the decades, they have done a brilliant job of providing an uninterrupted flow of mortgage capital to all of America. Their function has been that of buying mortgages originated and processed by approved banks and mortgage bankers and bundling the mortgages into securities to be sold to investors through Wall Street. FMNA does not service the loans. They are serviced by the origination entity and servicing rights are frequently sold to other servicing institutions. For many years mortgage delinquency was so low that FNMA’s approval requirement for seller-servicers was that they maintain less than 1% delinquency on their entire servicing portfolio.

FNMA’s underwriting and documentation standards were always reasonable but meticulous until they fell victim to the euphoria of an overly robust housing market and for whatever reason began to participate in the subprime marketplace. They may not have started the insanity but by virtue of their participation as America’s most trusted mortgage icon, they certainly should share in the responsibility for the mortgage meltdown.

The adjustable rate mortgage programs made sense for many home buyers and are still viable loan programs today. Their contribution to the meltdown was minimal. The real culprit was subprime mortgages. Stated income, stated assets, stated income and assets and of course low credit scores all fit into the subprime category.

Stated Income: How much sense does it make to grant a mortgage to those who can’t prove their income? This practice by its very nature is an invitation for fraud. Originally this deterrence from FNMA’s time tested underwriting standards was created to assist self employed borrowers whose business was prospering but profits were not taken by the principals and left in the company to grow the business or similar circumstances. Over time it escalated to the car wash employee stating an annual income of $80,000. The fraud comes into play when the loan officer coaches the borrower on how much income is required to qualify for the loan they are applying for. “OK that’s how much I make”. Borrowers would put themselves in this tenable position to take advantage of a housing market that was appreciating so rapidly that they would soon be priced out of ever owning a home.

Stated Asset: Traditional mortgage underwriting requires the borrower to document acceptable sources for the funds in conjunction with the mortgage to consummate the home purchase. Acceptable means non-borrowed funds but other criteria apply as well. How much sense does it make to grant a loan to someone who marginally qualifies to begin with, who is creating another debt by borrowing down payment and closing cost?

Stated Income and Assets: If stated income makes no sense and stated assets makes no sense, what lunacy combines the two.

Subprime credit: The Federal Housing Authority (FHA) has long been the resort of home buyers with low credit scores. Even so, the borrower is required to document isolated unforeseen circumstances that caused their credit to deteriorate and establish that the problems were all in the past. FHA traditionally has drawn the line at a credit score of 600 and requires that substantial liens and judgments be paid prior to closing on the mortgage. Subprime did not draw a line at all in many arenas and loans were routinely being made with scores down to 500. These borrowers obviously could not make consistent payments on their current monthly obligations and certainly were not ready to take on the responsibility of a mortgage.

All of the subprime mortgages provided a greater return on investment and the greater the risk the greater the return. Investing through Wall Street is the art mitigating risk and a form of gambling that drives the economy. It is up to our national institutions to maintain equilibrium and therein lays the preponderance of responsibility. What has the public up-in-arms is the lack of culpability by the executives of those institutions that have encouraged the American public to invest in these fraudulent mortgages. After all, the best way to rob a bank is to own one. No senior executives have been prosecuted at this time. If you steal 10 bucks from a 7-11, you go to jail. If you steal 10 Billion dollars from investors, you don’t! No wonder people are storming Wall Street.

 

 

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A Financially Rewarding Community Service Home Business

Posted on December 26, 2011 by Michael Roche

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A Breakthrough in the Cost of Diabetes Testing Supplies

Posted on November 17, 2011 by Michael Roche

This video is a departure from our normal subject matter but we are compelled to share it with our friends and visitors who suffer from diabetes. Call 888-983-7829 to have your questions answered by a live representative. For more information, visit http://capdiabeticprogram.com/1194

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Diabetes Mellitus – Understanding Causes, Symptoms and Treatment

Posted on November 16, 2011 by Michael Roche

 

Save Up To 70% On Diabetes Supplies!!

As of the year 2000, according to the World Health Organization, at least 171 million people worldwide suffer from diabetes. For at least 20 years, diabetes rates in North America have been increasing rapidly. In 2010 nearly twenty six million people have diabetes in the United States alone, and seven million people remain undiagnosed. Another fifty seven million people are estimated to have pre-diabetes. Diabetes mellitus occurs throughout the world, but is more common in the more developed countries.

The Centers for Disease Control has termed the growth in the number of diabetic patients an epidemic. The National Diabetes Information Clearinghouseestimates that diabetes costs $132 billion in the United States alone every year. Approximately10% of diabetes cases in North America are type 1, with the rest being type 2. It is estimated that one in three Americans born after 2000 will develop diabetes in their lifetime.

There are three main types of diabetes:

Type 1 diabetes: results from the body’s failure to produce insulin, and presently requires the person to inject insulin. (Also referred to as insulin-dependent diabetes mellitus, IDDM for short, and juvenile diabetes.)

Type 2 diabetes: results from insulin resistance, a condition in which cells fail to use insulin properly, sometimes combined with an absolute insulin deficiency. (Formerly referred to as non-insulin-dependent diabetes mellitus, NIDDM for short, and adult-onset diabetes.)

Gestational diabetes: is when pregnant women, who have never had diabetes before, have a high blood glucose level during pregnancy. It may precede development of type 2 diabetes mellitus.

Causes: The cause of diabetes depends on the type. Insulin is the principal hormone that regulates uptake of glucose from the blood into most cells (primarily muscle and fat cells, but not central nervous system cells). Therefore deficiency of insulin or the insensitivity of its receptors plays a central role in all forms of diabetes mellitus.

Type 1 diabetes is partly inherited and then triggered by certain infections, with some evidence pointing at Coxsackie B4 virus which can trigger a reaction which results in destruction of the insulin-producing beta cells of the pancreas. There is a genetic element in individual susceptibility to some of these triggers which has been traced to particular the genetic “self” identifiers relied upon by the immune system. However, even in those who have inherited the susceptibility, type 1 diabetes mellitus seems to require an environmental trigger.

Humans are capable of digesting some carbohydrates, in particular those most common in food; starch, and some carbohydrates such as sucrose, are converted within a few hours to simpler forms most notably the glucose (blood sugar), the principal carbohydrate energy source used by the body. The rest are passed on for processing by gut flora (microorganisms) largely in the colon. Insulin is released into the blood by beta cells (β-cells), found in the Islets of Langerhans (regions of the pancreas that contain its endocrine (i.e., hormone-producing) cells in the pancreas, in response to rising levels of blood glucose, typically after eating. Insulin is used by about two-thirds of the body’s cells to absorb glucose from the blood for use as fuel, for conversion to other needed molecules, or for storage.

Symptoms: The classical symptoms of diabetes are polyuria(frequent urination), polydipsia (increased thirst) and polyphagia (increased hunger). Symptoms may develop rapidly (weeks or months) in type 1 diabetes while in type 2 diabetes they usually develop much more slowly and may be subtle or absent.

Prolonged high blood glucose causes glucose absorption, leads to changes in the shape of the lenses of the eyes, resulting in vision changes; sustained sensible glucose control usually returns the lens to its original shape. Blurred vision is a common complaint leading to a diabetes diagnosis; type 1 should always be suspected in cases of rapid vision change, whereas with type 2 change is generally more gradual, but should still be suspected.

The most common symptoms of diabetes mellitus are those of fluid imbalance leading to urinary frequency and dehydration. Severe dehydration causes weakness, fatigue, and mental status changes. Symptoms may come and go as plasma glucose levels fluctuate. Hyperglycemia (high blood sugar) can also cause weight loss, nausea and vomiting, and blurred vision, and it may predispose to bacterial or fungal infections.

Treatment: Diabetes mellitus is a chronic disease which cannot be cured except in very specific situations but as of 2011 but a lot of research is in progress. It is associated with an impaired glucose cycle that alters the patient’s metabolism. Management concentrates on keeping blood sugar levels as close to normal as possible, without causing hypoglycemia (under-sweet blood). Management of this disease may include carefully managing diet, exercising, taking oral diabetes medication, using some form of insulin, and maintaining proper circulation in the extremities. The disease may be further complicated by other external factors such as stress, illness, menses, injection site scarring, and other physiological factors unique to individual patients.

Insulin is also the principal control signal for conversion of glucose to glycogen, a molecule that serves as the secondary long-term energy storage facility in liver and muscle cells. Lowered glucose levels result both in the reduced release of insulin from the beta cells and in the reverse conversion of glycogen to glucose when glucose levels fall. This is mainly controlled by the hormone glucagon which acts in the opposite manner to insulin. Glucose is forcibly produced from internal liver cell stores (as glycogen) re-enters the bloodstream. Normally liver cells do this when the level of insulin is low (which normally correlates with low levels of blood glucose).

Higher insulin levels increase some anabolic (“building up”) processes such as cell growth and duplication, protein synthesis, and fat storage. Insulin (or its shortage) is the principal signal in converting many of the bidirectional processes of metabolism from a catabolic (reducing to smaller elements such as fatty acids or amino acids) to an anabolic direction, and vice versa. In particular, a low insulin level is the trigger for entering or leaving ketosis (the fat burning metabolic phase).

This article was composed entirely from his research and information provided by Endocrinologists, medical journals and reviews. The objective was to take basic factual information and convert it into an easy to read and understand content without compromising medical facts. Michael Roche was inspired by the diabetes supplies program he represents through The Community Assistance Program that provides 50% to 70% discounts on diabetic supplies. Call 888-983-7829 code 1194 for information from a live person or visit http://capdiabeticprogram.com/1194.

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Financing Investment Property – Second Home or Rental Income

Posted on November 7, 2011 by Michael Roche

 

True Paradise Is When You Own It

Financing the purchase of an investment property is a little different than a home mortgage. Lenders perceive that there is higher level of risk associated with second homes and properties purchased for rental income and eventual appreciation. Statistics indicate that personal residences are better maintained than properties that are not permanently occupied by the owner. Certainly those who experience difficult financial setbacks are far more likely to dispose of investments rather than their home.

There is a significant difference in the standard Fannie Mae and Freddie Mac lending criteria for a second home verses a rental property. A second home is defined as a property that is occupied by the owner at least thirty days each year. Second homes are financed at lower interest rates and lower fees. This may seem like a contradiction to some since they theoretically do not generate income for the owner or at least not as much as a year around rental. Second home financing is considered lower risk to the lender for several reasons.

The primary factor is that since the owner will be occupying the property for some period of time each year there is no way to project the amount of rental income to offset the mortgage payment. Therefore, standard underwriting criteria requires that the borrower qualify for the mortgage on their primary residence as well as the new second home mortgage payment and any other debt that their credit report reveals. Underwriters do not count any projected rental income into their qualifying ratios because it is unpredictable. This is because the owner will occupy the vacation property for some period of time each year. Because it must be in good condition to attract short term tenants, it is likely to be well maintained.  

The important difference in qualifying for the rental property is that rental income is considered by the underwriter offsetting the mortgage payment to some degree.  When the lender’s appraiser inspects the property to determine the value related to the loan, an analysis is made of comparable rental properties. The appraiser will determine a “fair rental value”. The underwriter deducts 25% of the projected rental value for vacancy and maintenance and the balance is credited as hypothetical income to offset the new mortgage payment and credited to the underwriting ratios. Essentially, if the borrower qualifies for their current mortgage, it is not much of a stretch to qualify for the new payment.

Whereas second home mortgage interest rates are the same or only slightly higher than owner occupied rates, investment property rates are .5% to .75% higher with down payment requirements of 20 to 30%. This is simply the risk verses reward criteria lenders factor into their investments.

Mortgage underwriters are conscious of potential deception by borrowers who reach out for the better terms of second home financing. Other than qualifying for the new property without the benefit of future income, the property should be more than fifty miles from the borrower’s primary residence and make sense as a vacation destination to qualify as a second home. The fifty mile rule takes into consideration that most investors do not purchase rental properties a long distance from home because they are more difficult to manage. There is generally some flexibility in these criteria, particularly when there are special circumstances such as a property to be occupied rent free by a family member such as a student or elderly parent. It is up to the buyer to convince the underwriter that it is truly a second home occupied by the borrower at least 30 days a year. It frequently comes down to a judgment call by the underwriter.

Lenders are suspicious of any scenario that does not meet the strict criteria of second home financing because it is difficult to monitor when or if a second home becomes a rental property. The lender can’t prevent the borrower from renting the property on a long term lease if life circumstances change. There is rarely a restriction of this nature in the mortgage note and enforcement is questionable even if there is.

Over the decades there have been many attempts by mortgage lenders to demand repayment or revise the interest rate on owner occupied mortgages that have become rental properties but few have ever resulted in litigation. It generally comes down to the “intent” of the borrower at the time of loan closing.

Investigate the amazing “Automatic Rate Cut (ARC) Mortgage” as featured on ABC, CBS, Money, TIME, and more. http://arc-mortgage.com. It is a fixed rate loan that goes down when rates go down, but never goes back up. Never refinance and pay closing cost again.

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Credit Restoration – Using Section 609 of the FCRA to Restore Credit

Posted on November 4, 2011 by Michael Roche

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Financing Your Business – How to Obtain Working Capital to Grow or Start a Business

Posted on November 2, 2011 by Michael Roche

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Business Owners – An Unsecured Solution to Financing Your Business Growth

Posted on October 26, 2011 by Michael Roche

 

When The Banks Say NO! – You Can Count On The Merchant Credit Card Advance

Difficult economic conditions are affecting nearly every facet of America’s business community. High unemployment, deterioration of investment portfolios and overall lack of confidence in the economy are causing a “tightening of the belts” for most of the buying public. No one feels the pinch more than the small business owner; particularly those providing discretionary products and services. The life blood of any business is the availability of working capital. Operating lines of credit through local and national banks have been the traditional source of capital but the banks have tightened their belts as well. The small business owner is finding it next to impossible to secure credit lines from local and national banks without pledging significant personal assets.

Merchants that accept credit cards now have a source of working capital that transcends the underwriting restrictions and collateral requirements of bank lines of credit through credit card receipt advances. Categorically, this is not a loan. It is an advance up to $250,000 against future credit card sales receipts. There are no upfront fees,no personal liability and no credit score or personal financial requirements. The advances are based entirely upon the historical credit card receipts of the business including Visa, MasterCard, American Express and Diners Cards. The basic requirement is that the business has been in existence for six months and has a minimum of $5,000.00 credit card charges per month. The maximum advance is typically 150 to 200% of monthly credit card receipts averaged over the previous four months. Practically every merchant who meets the basic requirements is approved and normally within 48 hour of submitting a one page application form. The entire process can be completed in less than one week. The funds may be used for any worthwhile purpose including:

  •          Reduce or retire debt
  •          Working capital in slower months
  •          Purchase needed equipment or merchandise
  •          Expand or remodel business
  •          Open new location
  •          Buy out partners
  •          Pay taxes

Prior to funding the merchant will be required to provide the following documentation.

  •          Four complete credit card statements for each card accepted (All Pages)
  •          One complete bank statements (All Pages)
  •          Voided check with business name (to deposit funds)
  •          Copy of driver license (to verify signature)
  •          Signed funding contract

Repayment is accomplished through a deduction of a small percentage of the merchant’s daily credit card receipts and there is no requirement to change credit card processors. There is no interest rate applied to the funds because the credit card advance is not a loan. Total repayment includes a previously agreed upon fee to the institution granting the advance and is collected as part of the daily credit card receipt deductions through the credit card processor.

The Merchant Credit Card Advance Program is an affordable short term capital source and is available to business owners in all 50 states. It is a quick and easy practical solution to the working capital requirements of business owners with no upfront cost and is secured only by future credit card receipts.   

For details and/or a one page application form please contact Michael Roche, a direct lending representative of the consortium providing the advances at 703-328-7475 or email mikeroche01@gmail.com.

 

 

For details and/or a one page application form please contact Michael Roche, a direct lending representative of the consortium providing the advances at 703-328-7475 or email mikeroche01@gmail.com.   

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Mortgage Modification – Saving Your Home From the Big Bad Wolf

Posted on October 24, 2011 by Michael Roche

An Excerpt
From Our Free E-Book -THE HOME SAVER INFORMATION GUIDE

 

The American Dilemma - You Can Fight Back

The U.S. Department of Housing and Urban Development (HUD) defines a Loan Modification as a permanent change in one or more of the terms of a mortgagor’s loan, allowing the loan to be reinstated, and resulting in a payment the borrower can afford. Frequently a Loan Modification can help prevent a foreclosure through renegotiating the existing mortgage terms, which may include the following actions:

• Reduction in interest rate, or a change from a floating to a fixed rate, or in how the floating rate is computed

• Reduction in principal

• Reduction in late fees or other penalties

• Lengthening of the loan term

• Capping the monthly payment to a percentage of household income

There are many opportunities opened through the loan modification process and each homeowner’s situation is unique. The borrower can be current, late, in default, or in foreclosure at the time the application for modification is made. The lender is motivated to offer better terms to the borrower because of the expectation that the borrower will be able to afford a lower payment, and that a performing loan (one in which payments are current) will be more valuable ultimately than the proceeds (or losses) obtained from a foreclosure sale.

A homeowner who is in default on their mortgage has three basic “workout options” for keeping their home. They are:

1. Reinstatement

2. Forbearance Agreement

3. Loan Modification

Reinstatement – is calculated based upon how much money the home owner needs to come up with in order to pay back all of their back payments, late fees, attorney fees, back interest, and the such. For example, if a homeowner has $2,200/month payments, and they were four payments behind, then it would not be uncommon for the reinstatement figure to be around $11,000. Most people cannot come up with such a large sum to reinstate their mortgage, especially if they are behind in their payments.

Forbearance Agreement – is where the lender will take a portion of the reinstatement figure up front and have the homeowner pay the rest over the course of the next 6 to 12 months. In the above reinstatement example, the lender might require the homeowner to come up with $3,000 to $6,000 up front, and then spread the remaining amount owed over the coming several months in addition to their normal payment, resulting in payments going up to $2,700 per month or more! It is Very rare that a homeowner can afford a forbearance agreement as a workout option.

Loan Modification – This is the option that homeowners are most likely to be able to afford. With a loan modification, the lender will “re-write” the mortgage terms, resulting in the payments being adjusted to a figure that the borrower can afford! How much the payments go down is determined by the ability of the person negotiating the loan modification and the needs of the homeowner. It is not uncommon for 1st Choice Family Solutions to see successful loan modifications with:

• Interest rates reduced to 2%-6%

• ARM’s modified to 30 year fixed rate mortgages

• Payments reduced significantly (as much as 50% in principal and interest)

• Foreclosures stopped

You can probably see now why loan modifications are so critical! It is the only workout option that can so often help homeowners keep their homes. With all the Adjustable Rate Mortgages and other “creative” mortgages that were sold in this country over the past several years, loan modifications are critical to helping homeowners keep their homes.

FREE EBOOK – THE HOME SAVER INFORMATION GUIDE

We dedicate our service and this guide to

Our friends and visitors

Across the country who are struggling

To save their homes.

Please email mr@onlinemortgageresources.com and type “Guide” into the subject and we will respond with a PDF file attachment of the entire 37 page eBook. Please share it with anyone who needs help saving their home.

Has Time Run Out? You haven’t lost yet. WATCH THE VIDEO!

 Visit 1st Choice Family for details Click Here

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A Breakthrough in the Cost of Diabetes Testing Supplies

Posted on October 15, 2011 by Michael Roche

This article is posted compliments of http://onlinemortgageresources.com. We
are compelled to share it with our friends and visitors who suffer from
diabetes. Call toll free 888-983-7829 code 1194 to have your questions answered
by a live representative. Visit http://capdiabeticprogram.com/1194 for
more information and enrollment.

According to the World Health Organization, as of the end of 2000 at least 171 million people worldwide suffer from diabetes or 2.8% of the population. For at least 20 years, diabetes rates in North America have been increasing at almost epidemic proportions. In 2010 nearly twenty six million people have diabetes in the United States alone, and seven million people remain undiagnosed. Another fifty seven million people are estimated to have pre-diabetes. Diabetes mellitus occurs throughout the world, but is more common in the more developed countries. The cost of diabetes testing supplies and related medications has become a significant financial burden for the average American family.

The Community Assistance Program, well known as one of America’s leaders in prescription drug discounts, launched its new discount diabetic testing supplies program on November 15, 2011. The CAP Diabetic Program (CDP) functions separately but in conjunction with its Prescription Drug Discount Program that averages discounts of 55% on generic prescriptions at 80% of the pharmacies in the U.S. including all of the major chains.

The CDP member will receive a savings of over 50% off retail, over-the-counter pricing. Enrollment is free and includes:

  • FREE state of the art glucose no code meter with alternate site testing. It has a large digital readout and it speaks English and Spanish. The meter is guaranteed for the life of the program.
  • FREE lancing device
  • FREE monthly ultra-thin lancets
  • FREE carrying case
  • FREE monthly shipping to the door
  • FREE prescription discount cards (provided through the existing CAP prescription drug discount program)

Members pay only for the glucose testing strips. The average cost of testing strips in a pharmacy is $1.00 each and sometimes reaches $1.50 each, not including supplies. The Community Diabetic Program enrollee pays only $.50 each for their strips and supplies are free.

For patients testing three times per day, the cost of glucose testing strips and other supplies at retail pharmacies ranges from $1,576 to $1,868 annually. The Community Diabetic Program cost only $528 per year. Upon enrollment, the member will be electronically debited monthly from their checking account or credit card for the testing strips they will need to test their blood glucose levels monthly. The member will receive their free supplies and their testing strips shipped directly to their door 2 to 4 days and there are no shipping costs.

The Community Assistance Program is a subsidiary of National Benefit Builders Inc. Founded in 1994; NBBI has the highest possible Better Business Bureau rating of A+. Previously, CAP’s sole function has been that of distributing free prescription drug discount cards all over America and Puerto Rico. They had saved Americans over 100 million dollars at the pharmacy as of the end of 2010. CAP is excited about their new responsibility of administering the diabetic program and is dedicated to providing the same commitment to service that has elevated them to one of the top community service programs in America.Visit http://capdiabeticprogram.com/1194 for more information and enrollment.

 

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Applying For a Mortgage – How Lenders Evaluate a Loan Application

Posted on October 13, 2011 by Michael Roche

Have Your House In Order Before You Apply

For several reasons, most home buyers are apprehensive of the mortgage application process. Fear of the unknown is the primary concern followed by fear of rejection and anxiety related to divulging personal financial data. Applying for a mortgage becomes much more relaxed when the applicant has a thorough knowledge of how their qualifications are evaluated.

Every application is evaluated by an underwriter and the approval or rejection decision is based on four primary criteria. They are the borrower’s credit profile; income and debt ratios, liquid and semi liquid assets, and an appraisal of the contracted property. Each of these factors must meet certain standards for the application to be approved. These standards are consistent between lenders because mortgage originators universally subscribe to FNMA/FHLMC guidelines.

Credit Profile

Credit analysis is based on a tri-merged credit report consolidating the records of Experian, Trans Union, and Equifax into one report. Each of these repositories will provide a credit score. For underwriting evaluation the high and the low scores are eliminated although the credit data and history is not. The middle credit score is considered the more reliable application score because creditors do not always report to all three bureaus. Credit scores can vary significantly due to unreported positive or negative data. The minimum middle score required by lenders in today’s mortgage world is 640. Higher scores may provide the borrower some qualifying, loan program and interest rate advantages. Lower scores above 600 are not necessarily a show stopper but are certainly problematic.

All debt listed on the tri-merged credit report is considered in the evaluation process. Qualifying ratios are determined by the minimum monthly payment required by each credit account with an outstanding balance. Underwriters are normally only concerned with debts listed on the credit report. If an applicant bought an auto from a relative and is making monthly payments to that person, that debt would not be considered in qualifying because individuals do not normally report to the repositories and is therefore unknown to the underwriter. Obviously it is imperative that borrowers obtain a copy of their credit report and reconcile inaccuracies prior to applying for a mortgage.

Income and Debt Ratios

There are two mathematical calculations underwriters apply in evaluating the borrower’s ability to consistently make the mortgage payment. The “Income Ratio” is simply the total monthly mortgage payment divided by total gross monthly income. The “Debt Ratio” is the total monthly mortgage payment plus minimum payment on long term debt divided by gross monthly income. FNMA underwriting guidelines suggest a cap of 28% on the income ratio and 36% on the debt ratio. However this can be a little nebulous because there is a great deal of flexibility in the ratios based upon “compensating factors”. High credit scores, exceptional liquid and semi liquid assets, job stability, upward career mobility and other factors that give strength to borrowers ability to repay the loan. In these cases income ratios may be stretched into the high thirties and debt ratios into the high forties.

Home buyers frequently stretch their buying power to close to the limit because they know that a mortgage payment that is a little too high today will not be a problem in the future. Underwriters have flexibility in the debt sector and strategies can be employed to keep ratios in line. Installment loans do not count in the qualifying ratios if there are ten or fewer installments remaining. An auto loan with eighteen payments remaining may be paid down to ten months therefore eliminating the debt for ratio purposes as long as the borrower can document that the funds are available to do so. Student loans can be consolidated to reduce their monthly payment and credit card balances can be reduced.

Liquid Assets

For most first time home buyers the primary difficulty is accumulating the capital required for the purchase transaction. An FHA mortgage requires a down payment of 3.5% of the purchase price and the seller is allowed to pay all of the purchasers closing cost up to six percent of the purchase price. Since the closing costs are normally two to three percent of the sales price in most jurisdictions, the remainder of the six percent seller contribution can be used to buy down the interest rate substantially. This strategy will certainly limit the buyers negotiating power with the seller but a home can be purchased with less than 5% into the transaction.

Mortgage applicants are required to document the source of their funds to complete the purchase transaction plus reserves of several months of mortgage payments with some programs. In addition to bank deposits, sixty percent of 401K and IRA balances are considered liquid because these funds can be borrowed without interest or penalty. Otherwise, borrowed funds to complete the purchase are not allowed. Gifts from relatives must be documented but are acceptable. Deferred income payments or bonuses are also acceptable but must be received prior to closing. The primary concern of the underwriter is that all the required funds are not borrowed and thoroughly documented.

Appraisal

Lenders are investing in the applicant and the property as well. They will require that an approved appraiser inspect the subject property and submit a report. The borrower is required to pay for the appraisal and the credit report up front. All other fees associated with the loan are normally collected at settlement. The appraiser will evaluate recent comparable sales, property condition, neighborhood and community influences and determine a market value for the property. The lender will grant the mortgage based on the sales price or appraised value whichever is less. This is a great protection for the buyer as well as the lender.

For those who are comfortable that they can afford the payments, have their credit scores and debts in control and can reconcile the cash requirements, the mortgage approval is a matter of documentation and there is not much to be afraid of.

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Need Business Capital – Merchant Credit Card Advance

Posted on October 9, 2011 by Michael Roche

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Financing Your Business – How to Obtain Working Capital to Grow or Start a Business

Posted on October 4, 2011 by Michael Roche
Need Capital? We Have Funding For Your Business!

Whether you own a restaurant, dry cleaners, carpet store, medical practice or any other business that serves the general public financing a business is problematic in today’s economic environment. Traditional banks are not prepared to grant working capital loans to the well established business, let alone provide capital to start a new business. The bank’s security requirements are such that the business owners might just as well look to their personal resources or private capital sources. Over the decades it has been frequently said that banks only lend to those that don’t need a loan. This observation has never been more accurate than in today’s economic environment.

Most businesses need working capital to grow and prosper. The axiom “when you stop growing you start dying” is not far from a fact for many entrepreneurs. So where does one find access to working capital or a loan to start a business. The good news is that difficult economic conditions have fostered non-traditional funding sources that fill the void that the banks have found it necessary to create.

For instance, The Small Business Administration made sweeping changes to its loan programs in late 2010 and 2011 as a result of the U.S. Government’s focus on economic stimulus. Expanded lending criteria, low equity requirements and streamlining of the application process have served to make SBA financing not only a viable source of capital, but the small business’s preferred financing choice. The lending limits are now $150,000 to $5 million. SBA will finance working capital, furniture, fixture and equipment, purchase /refinance of the business’s commercial real estate or a combination of all of these needs at up to 90% of the cost with interest rates currently as low as 5.25% with terms up to 25 years. And yes, under certain conditions they will approve a loan to start a new business. SBA requires one new job be created by the business for every $50 thousand loaned. Some might say that this makes more sense than any other street level economic stimulus initiated by the administration so far. Supporting small business and creating new jobs in the process is an obvious assistance to economic growth.

Unsecured lines of credit (ULOC) up to $150 thousand are available to business owners with personal credit scores above 700 and no recent derogatory entries on their credit report. Interest rates on this program are surprisingly low particularly considering there is no income verification required and no financial statement or tax return requirement. These loans are approved based on the strength of the borrower’s ability to manage a business and their good credit. This is an ideal capital scenario for a start up business or franchise purchaser for several reasons. The maximum loan is $150,000 to each borrower legally associated with the new business. Family members, associates or partners with excellent credit might consider participating in a business for a negotiated interest in the future profits. This works exceptionally well for national and local franchise purchases because the lender will finance up to 90% of the franchise cost. The repayment structure is identical to a home equity line of credit where the monthly payment is based upon the actual amount outstanding, not the total maximum credit line available. To make it even more palatable for the start up business the lenders recognize that the business is not likely to generate much profit in the early stages so there is no interest charged in the first six months and there are no upfront fees. This is obviously not a bank loan. It is funded by institutional and private investor sources.

For quick and easy capital for almost purpose, many businesses find Merchant Credit Card Advance programs their most practical solution. These programs do not actually lend capital. They advance funds up to 200% of the average of the merchant’s previous four to six months of credit card receipts. What makes this source popular is that there are no upfront fees, no personal liability and no credit score or personal financial requirements. Repayment is accomplished through a small percentage of future daily credit card receipts. There are no closing fees and it is affordable. The basic requirement is that the business has been in existence for six months and has a minimum of $5,000.00 credit card charges per month.

When the business owner looks beyond the local banks and traditional lending sources, there is a new world of capital resources looking for an opportunity to lend their money at reasonable terms. As always, the cost to the merchant comes down to risk verses reward. Even so, those with credit issues or marginal track records do not have to resort to the exorbitant cost of hard money lending to grow and maintain their enterprises.

Michael Roche the author of this article is a principal of American Capital Investors Group representing a consortium of private and institutional investors throughout the United States. Michael, with thirty years of direct lending experience, directs small businesses through variety of solutions to their financing and capitalization needs. Contact him directly for a casual discussion on how he can assist your business. Mikeroche01@gmail.com or call 703-328-7475. It cost absolutely nothing to discover your financing options.

Watch These Videos on Business Financing Through SBA


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Prescription Drug Discount Cards – Yes, They Really Save Money and for Many – Lots of it.

Posted on October 4, 2011 by Michael Roche

 

It Is Absolutely Free And Saves On All Prescription Drugs

Millions of Americans have to pay top dollar for their medications because they have no prescription insurance or they are not part of a large organization that provides their employees with a comprehensive medical insurance plan that includes prescription drug coverage. The people that can afford it the least are charged the most. In fact, over 48 million Americans have no health insurance.

 If you are not insured or your health insurance does not cover medications, the best alternative is a prescription drug discount card. In some cases these cards are more effective than many insurance plans or at least more comprehensive in that they provide discounts on medications not covered by insurance plans. In fact, they provide discounts on every prescription drug approved by the U.S. Food and Drug Administration. That obviously includes any drug your doctor may prescribe. Smoking cessation medications, sexual potency and diabetes supplies are examples of medications that are not normally covered by insurance but can be obtained at greatly reduced rates by presenting the card to your pharmacist. If your insurance requires high co-pays, ask the pharmacist if the drug card will save you money. That is sometimes the case.  And let’s not forget about the Medicade “donut hole.” You can use the cards while you are in it.

Many people require very expensive medications. Obtaining insurance coverage can become a serious problem and/or very expensive when there is a pre-existing condition. Discount cards can save up to 85% on prescription drugs at over 80% of the pharmacies in the United States and averages 15% on brand names and 55% on generics. These cards can be used over and over by all family members and friends. They never expire everyone qualifies.

Organizations such as National Benefits Builders Inc. (highest possible rating by the Better Business Bureau of A+) through their Community Assistance Program have negotiated these discounts with the pharmaceutical companies that manufacture the drugs. Over the past five years practically every one of the pharmaceutical companies have subscribed to the program. They can afford to. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue. The high price of prescription drugs is one of the major areas of discussion in the U.S. health care reform debate. Over 80% of the pharmacies in the U.S. have fallen in line as well. They are aware that many of the drug card distributers provide a prescription “look up” capability on their web sites that will allow anyone to locate local pharmacies and price their medications at each pharmacy. Many people are not aware that there can be significant price differences between pharmacies. Shop the pharmacies and save even more money. Hopefully, as the public catches on, the competitive factors will contribute to lower pharmacy mark ups.

 The process is very simple with many distributors. Their web sites will allow you to print your card. It doesn’t even have to be printed on card stock. Plain paper will work just as well. It is the Rx bin number and Rx group number that provide the discounts. Just hand it to your pharmacist when you pick up your prescription and their computer will determine your savings.

Almost everyone who visits a doctor will find an application for these cards at some point in time. There is even a separate card for your pets. The cards are free. You just provide a space in your wallet so that the next time you are leaving the doctor’s office and going directly to the pharmacy, you don’t have to wonder if you would have saved money if you had the card to present to the pharmacist.

You can print your free prescription drug discount card at http://www.usarx.org. It is ready for the pharmacist when you are. Michael Roche is a National Outreach Coordinator for The Community Assistance Program, the U.S. leader in prescription drug card distribution. He will be pleased to mail you plastic wallet discount cards for your family, friends and neighbors. Just write a comment on this article and include your mailing address and the number of cards you need. If economic conditions have reduced your income to the point where you can no longer afford your medications even with a discount card, http://usarx.org will also assist you in applying for a community assistance program that will reduce most of the more expensive medications to less than $20.00. Michael Roche, the author of this article is pleased to answer your inquiries at mr@onlinemortgageresources.com or phone 703-328-7475.

 

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Direct Mail Marketing – A Strategy to Deliver Your Message and Get It Read

Posted on October 4, 2011 by Michael Roche
Too Much Mail But Yours Will Be Opened

Not Our Normal Subject Matter But This Works So Well For Me I Just Had To Share It

There seems to be a concern among marketing managers that direct mail marketing is effectively dying. There may be some truth to that statement. Certainly the cost of mail has increased in recent years. Effective marketing is of course all about reaching the right prospect with the right message and getting the maximum return for the advertising dollar. In the past, direct mail marketing has been one of the least expensive and most effective methods of presenting a message to the public. Studies have indicated that in recent years response rates have dropped precipitously due to over saturation. Recognized mail is separated from what is obviously a solicitation and it isn’t even opened or read.

In general, postcards are more effective than letters because they are less expensive than letters. Also they command attention with an element of “flash” and there is no conscience effort to open to open an envelope required. On the other hand, postcards are impersonal and usually do not thoroughly deliver the sales message in a formal and exclusive manner. When the recipient receives a postcard, it is obviously a mass solicitation rather than a personal invitation. Envelopes with a return address from what the recipient perceives as a professional organization may get more attention “if they are opened”.

So how do you get them opened? One method is to provide something of real value in the envelope and call attention to it on the face of the envelope. A major insurance company mailing hundreds of thousands of solicitation mailers per month was considering abandoning their direct mail campaigns because their resulting rate of leads had dwindled in recent years. The Director of Marketing was introduced to the idea of including prescription drug discount wallet cards in the envelope. The insurance company did not offer medical insurance of any kind so there was no product conflict. The drug cards provide a discount of up to 85% on all prescription drugs at over 80% of the pharmacies in the US. The outside of the envelope was branded “A Gift From XYZ Insurance Company”. The implication is if you open the envelope you will receive something of value at no cost to you. The second motivation to open the envelope comes from the fact that the recipient can feel the plastic wallet cards in the envelope. Curiosity alone motivates the recipient to open the envelope even if the message is mistrusted.

The insurance company determined that they could include a card for the family, a second card specifically designed for savings on pet medications   as well as their marketing piece in the envelope without increasing the bulk mail postage cost. The drug cards are free so the only additional cost to the direct mail marketing campaign is the printing cost of the cards which is two cents each when printed in volume. The director of marketing reported that from their first 100,000 direct mailings incorporating the drug card they received a 30% increase in leads for their agents.

The result of this strategy is that the recipient is gifted something of real value that saves money repeatedly and will never expire. The card is branded with the donor’s company name and logo. Each time the card is presented to a pharmacist and money is saved attention is brought to the donor. Certainly the intended message to the recipient is better received; particularly on subsequent mailings.

This strategy will work for almost any industry promoting products or services. It only takes a little imagination to determine the correct message to convey the idea that the direct mailing piece should be opened. The message on the plastic wallet card “Free Prescription Drug Discount Card” promotes the idea that this is not another piece of junk mail to discard without reading.

For those who are considering a direct mail marketing campaign or those who have had little success in the past this may be the solution to getting your message across. There may be other ways of inducing recipients to open your envelope but offering a service of true value at practically zero cost would seem to be the most practical approach. Direct mail marketing isn’t dying but like anything else in our increasingly competitive environment it takes imagination to stay ahead of the competition.

Anyone marketing by direct mail will want to give this a try? Visit http://usarx.org to learn more about how the free prescription drug cards work or read the article “Prescription Drug Discount Cards – Yes, They Really Save Money and for Many – Lots of it” posted in our Library “Latest Tips”.

The printing cost for the plastic wallet cared printed on both sides branded to promote your business are 1,000 cards for $55.00, 2,500 cards  for $86.00 and 10,000 cards  for $210.00. There is no profit for CAP in printing these cards. Contact Mike Roche to order cards. 703-328-7475 or mikeroche01@gmail.com

 

 

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Mortgage Risk And Mortgage Refinance

Posted on October 3, 2011 by Michael Roche

By guest author: Donna Nell

Mortgages provide buyers an opportunity to purchase their dream home based on their current gross monthly income. The loan application will be approved if the mortgage payment along with the minimum payment on long term debt doesn’t exceed a certain percentage of current gross monthly income. The exact percentage depends upon other factors such as credit score and liquid assets. The borrower is required to make a monthly installments and a stipulated interest rate is charged on the loaned amount until it is paid off. If the borrower defaults, the lender can sell the property through a legally consummated foreclosure. These banks or lenders have their personal realtors who prepare an analysis of the market and recommend a listing price. They are motivated to sell the property at the highest price possible to mitigate their losses.

Avoid Delinquency

If you fall behind on your mortgage payments you will not be able to refinance as delinquency is reflected on your credit report and underwriters are unlikely to approve a refinance when there has been more than one delinquency in the past year. If there is any indication that there will be a problem making future mortgage payments on time and there is substantial equity in the property a cash-out refinance may be a solution to the dilemma. You can put the realized funds from the refinance aside for future payments. Every lender has down payment or equity requirements in the case of a refinance. Equity requirements differ according to the loan program. FHA mortgages have the lowest restriction at 3.5% of the appraised value.

Loss of Income

There is no certainty of stable monthly income today. Many people have suffered a job loss or a wage cut due to the recent economic meltdown. Therefore, you can face financial hardship and there might be risk of defaulting on your mortgage payments. In case you are unable to pay your mortgage loan on time, to avoid delinquency, an option could be to move to a smaller or less expensive rental apartment and in turn rent your present house and use the rental income to make the mortgage payment. It is advisable to rent the house until you have stable income and you are capable of resuming making loan payments.      

Mortgage Options

Mortgages generally fall into two categories, fixed rate and adjustable. Fixed rate mortgages have the least risk to the borrower in that the payment never changes during the term of the loan. The exception is when real estate taxes increase or decrease.  In case of adjustable rate mortgages, the interest rate will fluctuate during the term of mortgage. The interest rate is fixed for a period of time and normally adjusts annually after the initial fixed rate period.  Therefore, if the market interest rate rises then the borrower has to pay high interest on the mortgage loan. These loans generally have a lower initial interest rate than fixed rate mortgages and are appealing to those who are certain that they will own the property for a short period of time. For example, a military person on a three year assignment might option for a five year adjustable rate mortgage to take advantage of the lower interest rate knowing that there is no risk of a rate increase for five years.

Mortgage Refinancing

When interest rates decline significantly, refinancing usually makes sense. Be aware that refinancing a mortgage can prove to be expensive as there are closing costs to be paid. Loan origination fees, settlement costs, state and local taxes and property appraisal are applicable to every refinance. Comparing these costs with the new interest rate is basically a matter of determining how long it will take to recoup the cost to refinance with the monthly savings realized by the lower mortgage payment verses how long you think you will own the property. Although there are other considerations, if the refinance saves $100.00 per month and the closing costs are $3,000. It will take 30 months to recoup the closing costs as a result of the lower payment.

The author of this article, Donna Nell manages the world’s largest mortgage community http://mortgagefit.com. With over 60,000 members and lenders, her site provides a community forum of over 550 active participants to respond to your mortgage related questions.

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