There is a lot of confusion between the terms “reverse amortization mortgage” and “reverse mortgage.” Compounding the confusion is the fact that the word “amortization” is probably the hardest word in the English language to spell. It is commonly written by some very intelligent folks as amorazation or amerazation.

As a result, many people just leave the amortization part out, and do web searches for reverse mortgages when really what they want to find out about, and hopefully learn to avoid, are negative amortization mortgages.

On the other hand, some people may be interested in a reverse mortgage, but end up being solicited by a throng of crazed mortgage brokers who want to sell them a negative amortization mortgage.

Let’s see if we can help lift the fog on these confusing terms that describe a couple of very dissimilar types of mortgages.

A reverse or negative amortization mortgage

A negative amortization mortgage is sometimes referred to as a reverse amortization mortgage. With either terminology, what happens with this type of mortgage is that the principal owed on the mortgage is allowed to increase in the early stage of the mortgage. This early stage is commonly referred to as the negative amortization or negam portion of the mortgage. This negam stage usually lasts 3 to 5 years.

For example, a borrower takes a mortgage on his/her property for $300,000. Under the terms of the mortgage, he/she will be required to make the minimum monthly payment of $988.99 each month for the first 60 months, or 5 years of the mortgage. This 5-year period is, of course, the negam period. When you calculate the interest rate for this negam period you’ll find that it is 1.173%!

When the negam period ends, basically, the party’s over. Under the terms of this particular mortgage, the interest rate increases to 7.75% and that’s not all! The interest rate has been 7.75% all along, but the borrower was not obligated to pay this much during the negam stage of the loan. So, what happened was, the interest that wasn’t being paid during the negam stage was being added on to the principal of the mortgage. Now, 5 years later, the principal that was originally $300,000 has ballooned to $369,241.25!

Let’s run the numbers for the post negam or regular stage of this mortgage. The term of the mortgage is 30 years. So now, there are 25 years left for the borrower to pay $369,241.25 at 7.75%. This will require a minimum monthly payment of $2,788.99, or exactly $1,800 a month more than the borrower has been paying.

These numbers are the exact numbers taken from an existing negative amortization mortgage. There are many variations to how a negam works, but with every one, the monthly payment starts small and the principal increases in the negam period. Then, in the regular period, the required monthly payment increases, sometimes to 2, 3 or even 4 times its original amount.

A reverse mortgage

A reverse mortgage was devised to help retired people augment their income. This type of mortgage is available to people who are 62 years of age and older.

With a reverse mortgage the retiree sells off some of his/her equity in their home and can opt to receive the payment in a lump sum, as monthly payments, or as has become most common, a line of credit to be used at any time for anything.

The person taking the reverse mortgage is not required to pay anything back on the mortgage, but sometimes there is a time limit to which he/she will receive payments on the reverse mortgage.

Many times a reverse mortgage is structured where a person sells his/her equity and in return will receive monthly payments for life. Of course, in this case, after the homeowner is deceased, he/she cannot leave the equity, which has been sold in the reverse mortgage to his/her descendants. So, if all the equity has been used for a reverse mortgage, the deceased person will not be able to leave the home to anyone.

Despite that drawback, a reverse mortgage can be great tool for a retired person to use as a way to add more income to his/her pension and/or social security.

On the other hand a reverse or negative amortization mortgage was devised, in my opinion, as a way for banks and other lenders to drum up more business by qualifying borrowers who may eventually end up in foreclosure because of them.

Fixed rate mortgage California allows you to stay carefree from fluctuating interest rates as you need pay fixed rate throughout tenure of your mortgage.

Under fixed rate mortgage, you know about the amount which needs to be paid by you. There are many other things which you know when you are opting for this mortgage option such as:

Interest to be paid on mortgage amount
Exact amount of your monthly installments
Allocation of interest amount from the principal amount
Tenure of your mortgage and the time when you wish to repay full mortgage

Know the exact rate:

Fixed rate mortgage California offers you a fixed interest rate. While you take a new loan, interest rate would be guaranteed for the lowest rate within initial 90 days just before your actual purchase is made.

Pick what suits you:

Fixed rate mortgage California lender offers you a choice between fixed and flexible mortgage and you can select the one which offers you the best level of security.

Select your payment schedule:

Normally, you can take fixed rate mortgage loan for tenure of 15 years or 30 years. But tenure can also be reduced to 5 years. Depending on your capability for repayment, you can decide the tenure of loan. Hence, amortization of loan can be done as per your choice. There are also several payments options which can be scheduled by you. It can be on a monthly basis, weekly or on fortnight basis.

Choice to pay mortgage fast:

Fixed rate mortgage California lenders offers many options to ensure good savings and repay the mortgage is lesser period of time. You can make double payments if you feel you can do so. Another option which you can avail is prepayment of capital amount at initial stage. Faster mortgage payments can also be made by increasing the amount of your monthly payments.

Gathering these details related to fixed rate mortgage California can help you to select the ideal mortgage option from all those are available. If you still have any queries, consulting a good financial advisor can also help you to choose the best option. A thorough research on various mortgage products can also be helpful to you. If you want to take help of financial advisor for this purpose, you can go online and make search for such advisors. There are many providers offering such consulting services but seek only the reliable ones to avoid any regrets in future.

You need mortgage marketing ideas to help you into the field and meet real estate agents, but you do not want to do cold calling. It does not need to be as impossible as some loan officers make it. Each time you leave your office and go in the field, there is a plethora of opportunities waiting to be captured. Everytime you talk with real estate agents there’s something to benefit.

And what is required is to know where to prospect and the clues to uncover.

For instance, in your next meeting with a Realtor, tell them you are desire to work with one or 2 new real estate agents and you’d like to uncover other real estate agents just like them.

Describe some characteristics, and then ask who they know that fits it. After they’ve disclosed a name or two, ask them if they would not mind getting permission from the Realtor for you to telephone her or him or schedule a meeting. This simple mortgage marketing idea saves you tons of money because the Realtor is doing the hard part.

More Mortgage Marketing Ideas
Introducing your services to the seller’s Realtor is another. If you have not done it before, it’s deceptively simple. Just telephone them and introduce yourself as the mortgage broker handling the buyer’s home financing.

There is no need to tell them of your services, just contact them each step of the way in the home financing process like you do with the buyer’s Realtor. Instead of telling the seller’s real estate agent about your service, they get to experience it firsthand. The fact alone that you called and introduced yourself makes an incredible first impression most seller agents find unbelievable.

Another mortgage marketing idea is to offer free training to real estate agents. Whenever you can get a presentation in front of real estate agents, it is the best use of your money. You share the same amount of information to a group as you would to an individual, yet your chances of a Realtor finding you so they can refer buyers is compounded. Don’t bring snacks; let them feed their stomach while you feed their brains. It’s a fair exchange and if you can not do it in their office, do it offsite.

Several of my clients train and their efforts always proves successful. Groups grow larger each time they teach a class. You promote yourself as an expert and real estate agents always want more information which helps you build a relationship. Whenever they have a future client you get the referral.

It applies to mortgage marketing flyers too. The smart thing to do is to use the ad space to pump your expertise, not a solicitation. And tell it from your customer’s viewpoint. It’s better that another person dotes about you, then you doing it yourself. Essentially, make your marketing flyers a sequence of success examples and real estate agents will look forward to receiving them if you employ a regular frequency.

Marketing to Realtors isn’t frustrating when you’re inspired with mortgage marketing ideas that make your job easier. What’s critical is you’re doing something and being active. Nobody ever got real estate agents to refer buyers to them being invisible.

Just use one mortgage marketing idea to begin. Use it, try it different ways until you have success and then use the next one. Before you know it, you have multiple mortgage marketing ideas working for you and your pipeline is growing giving you the money you desire.