When Should You Use Interest Only Mortgage Loans

People buy property for different reasons such as for building homes or for short-term or long-term investments. Defining your property goals is essential when choosing the right type of financing for purchasing property. There are hundreds of loan products available, each with distinctive features that are suitable for specific needs. If you’re planning a real estate business, interest only mortgage loans may serve your purposes.

What are Interest Only Mortgage Loans?

Loans generally consist of a principal amount, interest rate and loan period. A borrower ordinarily repays the loan in regular installments or amortization which combine a portion of the principal amount and the corresponding interest charge, spread over the entire loan period. In an interest only loan, you will only pay the interest charges for the initial period, usually 5 years. After the interest-only period, your monthly amortization will now include the principal and interest which must be paid until the end of the loan term.

This type of mortgage loan has its advantages.

• The borrower has lower repayments in the initial period. This frees up the borrower’s cash which may be used for renovation or expansion.

• The cost of buying a residential property is reduced in the short-term.

On the other hand, property buyers may find it difficult to cope with the sudden increase in repayments at the end of the interest-only period.

Who it’s for

The interest only mortgage loan is suitable only for short-term property investors who intend to sell their investments quickly for profit. With this type of loan, the investment cost is limited to the interest charges during the interest-only period for as long as the investor divests the mortgaged property before the end of this period. The funds obtained from the short-term sale can then be used to settle the principal at the end of the interest only period.

This type of loan can be risky for homebuyers who intend to hold property for long-term income and growth. Beyond the interest-only period, your repayments can be higher than a loan with principal and interest payments for the full term. Economic factors can and do change over time. Market demand and other factors can affect future cash flow that you may not be prepared to meet the higher repayments. Long term investors may be best suited for fixed interest home loans or home equity loans, where it’s easier to plan their budgets around the regular amortization.

Interest-only mortgage loans are not always charged higher interest rates than other types of loans. Ask a mortgage broker to assist you in finding the best rates for your needs.

If Sales and Marketing is the Left Arm of Business, Then Traffic Generation is the Right Arm

In Internet marketing, we often learn the different strategies and techniques on sales and marketing…typically the following fundamental steps:

- how to create a compelling headline to attract the visitors get interested to browse through your product website
- how to attract, seduce the online visitors to stay on the sales page longer to read on
- how to tell the customer the problem he/she is encountering, and suffering
- how to show customer that your product can precisely solve his/her problem

In this manner, those visitors who are convinced by your sales and marketing presentation will click the ‘Buy’ button and make payment with thanks to you in their heart!

In the above scenario, your great sales and marketing plan and strategies have successfully closed sales for you. But bear in mind, you are making the assumption that there are unlimited visitors visiting your product website; as Sales, be it online or offline, is after-all a number game.

How to make your assumption of huge, if not, unlimited amount of traffic visiting your product site come true in reality?

- how do you ensure huge number of visitors clicking to take the first view of your website? Are you going to pay high price to ‘AdWord’ for anyone to click on your website?
- how to make your website appears on the first page of the Search Engine, so as to greatly increase the chances of visitors clicking on your website? Are you going to pay a high fee to Search Engine just to appear on the sponsor link of first page?
- how to maintain your website be on the first page of the Search Engine consistently? Are you going to keep paying high fee to Search Engine to maintain his first page position?
- how do you screen off the targeted visitors from the non-targeted visitors? Are you going to pay high price to ‘Pay Per Click’?

Online sales and marketing strategies in general are the same as that in offline sales and marketing. However, the conversion rate from Internet marketing is much lower than offline sales and marketing, probably because

- people still feel more secured to touch and try the product to increase the probability of purchase of physical product
- there are still people who prefer to own well-binded book with cover to digital eBook

Having analyzed the above-mentioned, we can conclude that having great list of traffic is the only feasible means to increase sales conversion rate in Internet marketing, besides the sales and marketing strategies.

Singapore produces a number, though few, yet very successful Internet marketers that can make money via the Internet using their unique Money Making Secrets. Most of them are already living on Internet marketing as their main source of income. Johan Mok, Ewen Chia and Alvin Phang are few to mention that have made it to the top. With respect to traffic generation and Search Engine Optimization, KC Tan has his own recipes to get your website to the first page of Search Engine.

Why Sales and Marketing MUST Align

Let’s talk about a sales and marketing problem most companies have struggled with for years. I’m not talking about lead generation, market share, or customer retention, although it does impact each of those things and so much more. I’m talking about the chasm that separates Sales and Marketing.

Take a look at a typical day in the life of both Sales and Marketing to see if you can relate…

A Day in the Life of a Marketer

A marketer works hard to generate leads for her sales team. She optimizes conversion opportunities across her company’s website, delivers email campaigns, builds landing pages and delivers valuable gated content. Her work generates a steady stream of leads, which she immediately passes along to the sales team. Because, after all, more leads is better, right?

Our marketer toils away each day to create valuable marketing content and sales support materials. She sends emails to the sales team to notify them each new piece of content as it is finalized. She even uploads each new item to the company’s Dropbox account so everyone can access it.

Ah, sweet success!

But not for long…

Her blood boils when she learns her sales reps haven’t even so much as looked at the leads she has been generating. She shivers with frustration when she finds out most of the sales team is somehow unaware of most of the content she has created. How can this be possible?

Marketing feels undervalued and ignored.

A Day in the Life of a Sales Rep

On the other side of the Grand Sales and Marketing Canyon, a sales rep spends her day responding to urgent prospect requests, traveling from meeting to meeting, communicating with customers, reacting to unexpected changes with buyers – hers is a life of constant chaos and change.

She often needs content in order to respond to immediate needs of her prospects. However, this leads to frustration because the materials she has access to are not the materials she needs. They are outdated or – worse yet – they don’t even seem to exist. This often means she ends up creating content on the spot. This requires time she simply doesn’t have. She can’t understand why Marketing doesn’t produce the content she needs.

To top it off she receives endless notifications from Marketing about new leads she to follow up with, adding pressure to her already stress-filled day. She doesn’t have time to stay on top of communication with her own prospects, let alone a list of new leads from Marketing. Besides, Marketing leads never seem to be qualified and following up with them always seems to be a waste of her time.

Sales feels misunderstood and unsupported by Marketing.

Sound familiar? Yeah, I thought so.

Unfortunately, this situation is incredibly common. Marketers are not alone in their feelings of being undervalued and ignored. In fact, as much as 80% of marketing leads will never be acted upon by Sales. And according to the American Marketing Association, a whopping 90% of selling content is never actually used in selling.

Sales reps, too, are justified in their frustration. The CMO council found that instead of selling, sales people spend upwards of 40% of their time creating their own messaging and tools. Also, according to HubSpot, only 27% of leads sent to sales by marketing are qualified first.

Pretty sad statistics, right? So why is it happening? It’s that chasm I mentioned earlier between Sales and Marketing. These two teams are disconnected in a big way and it’s taking a toll on the companies they work for.

It’s time to close the gap and align Sales and Marketing once and for all. While you would probably agree, you may not fully understand why it’s so important or what you can do about it.

Why Sales and Marketing MUST Align

Reason #1: Your Customers See It

According to the IDC, as much as 57% of customers feel that salespeople are poorly preparedor not prepared at all for initial meetings.

Could it be that these sales reps didn’t have the resources they needed to properly prepare for these initial meetings? After all, these meetings with prospective customers are pretty important to sales reps – they are key milestones in the sales process! The vast majority of sales reps would certainly want to be prepared for them so they could be as successful as possible. They just didn’t have the content they needed to adequately prepare.

Sales reps need content to effectively engage prospects and close sales. But not just any content will do. They need content that speaks directly to the needs, challenges and preferences of prospects. And they need to be able to access the most current versions of it whenever they need it.

What To Do

Take the first step toward Sales and Marketing alignment and talk to the sales reps directly. Work to clearly understand the challenges they face throughout the sales process. Ask them about the gaps they see in your marketing content. Try to understand how they need to access content and when and where they need it most. Attempt to learn what marketing support has worked and what has not – and why. Listen to their feedback and list the ways you can better serve your sales reps.

One strategy I like to use is asking sales reps to write down questions they frequently receive from prospects. Then, use this list of FAQs as a list of content you can create to directly support the sales reps the next time they encounter such inquiries.

The important takeaway here is that marketers can take the first step toward Sales and Marketing alignment by starting a simple conversation with sales reps. Just ask them what they need and work out a way to deliver it.

Reason #2: Lead Overload

When Sales and Marketing aren’t aligned, inefficiencies are bound to happen. Like the examples given above, chances are pretty good that Marketing is delivering leads that Sales will never touch. With increasing adoption of marketing automation platforms and their ability to help marketers do more than ever before, marketers are capable of generating a lot of leads. That’s great. What’s not so great is when they just pass them all along to sales.

Why is this such a problem? When sales reps are given more leads than they are physically able to follow up with, they become saturated… and those leads get neglected Here’s an example:

Let’s say you’ve been striving to reach a lead generation goal of 30 leads per rep per week. That sounds great! That is, until you learn that each rep typically has about two hours per week to follow up with leads and each lead typically requires about 20 minutes of follow up time. You now realize that each rep has the capacity to follow up with just six leads each week. You have been working hard to send them 30.

See the problem here? In this scenario, you would be sending them 24 more leads than they can physically handle. Every. Single. Week.

What you thought was great marketing success was actually overloading sales. And it was leading to neglected leads.

What To Do

As the previous example briefly mentioned, one of the first steps in solving this problem is by talking to your sales reps and Sales leadership directly to understand the realistic number of leads each rep can follow up with each week. Then adjust the number of leads you deliver accordingly.

This doesn’t mean you aim try to generate fewer leads. Not at all. Instead, it means you might need to nurture them and better qualify them before handing them off to Sales.

More work for marketing? Perhaps. But wouldn’t it be worth it if your work was actually used? By nurturing leads before handing them off to Sales, you increase the chances of the leads you deliver actually becoming customers.

On average, according to a Demand Gen Report nurtured leads produce a 20% increase in sales opportunities versus non-nurtured leads. What’s more, companies that excel at lead nurturing generate 50% more leads that are truly sales-ready. Even better – they produce these leads a third of the cost of companies that aren’t so great at lead nurturing.

Invest some time in better understanding Sales and each rep’s capacity for following up with leads. Then refine your lead nurturing process to improve the quality and rethink the quantity of leads you deliver to sales.

Reason #3: Revenue Gone to Waste

When sales reps spend time searching for or creating content, this not only duplicates the efforts of marketing, it also pulls them away from important sales opportunities. And those wasted opportunities add up to wasted revenue – lots of it.

Consider this: A study by IDC found that by saving a single sales rep just 60 minutes of prep time each week, a company could realize additional revenue generation $300,000 or more per rep! In a company with just 10 reps, that’s $3 million each year. If you’ve got 100 reps, that’s a staggering $300MM per year.

If just 60 minutes of prep time can translate into $300,000 in revenue, just imagine how much potential revenue is wasted in your organization as sales reps struggle to find the content they need.

What To Do

Clear out the clutter. As you work to build a better relationship with your sales reps and establish more frequent, meaningful communication, look for ways you can reduce the clutter – in both of your lives.

Quite often, technology can help here. There are apps available today to help manage content. Anything from Google Drive to Basecamp, Dropbox to Salesforce – any number of tools can serve as a virtual marketing library for your content. Each one is available anywhere and on any device with an internet connection so sales reps should have no problem getting the content they need whenever they need it.

If you can commit to making only the most current versions of content available in this marketing library, ask your sales reps to also make a commitment. Ask them to retrieve these up-to-date versions of content whenever they need to use it – instead of using outdated content stored elsewhere or creating their own.

Close the gap between Sales and Marketing. Reach out to Sales to better understand their challenges and needs. Work together to better serve your customers. Sure, it will improve your business and probably increase revenue, but it will also improve your workplace happiness, and can you really put a price on that?