The home equity loan process generally begins with an appraisal of the house, followed by the underwriting process, the application and an assessment of assets. Receive a new mortgage coupon and any checks at the closing table of a home equity loan meeting withinformation from a registered financial consultant in this free video on home equity loans. Expert: Patrick Munro Contact: www.northstarnavigator.com Bio: Patrick Munro is a registered financial consultant (RFC) with outstanding sales volume of progressive financial products and solutions to the senior and boomer marketplace. Filmmaker: Reel Media LLC

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Advantages And Disadvantages Of Home Equity Loans

For example, nearly 50 percent of credit line holders cited the convenience of obtaining money as needed as an important advantage; only 7 percent of traditional home equity loan users mentioned this factor (table 6). In addition, in comparing users of the two types of loans, a larger proportion of the credit line holders mentioned cost, principally a lack of fees, as an important advantage. Many observers have suggested that tax deductibility of interest payments likely is an important factor contributing to the recent growth of home equity credit lines, and the survey responses support this conclusion. Nearly 30 percent of credit line holders and 16 percent of traditional home equity loan users mentioned tax deductibility as an advantage of home equity loans compared with other types of consumer credit. Consumers also cited several potential disadvantages of home equity products. Roughly equal proportions of the users of each type of home equity product mentioned the risk of losing the home as a disadvantage, but credit line holders expressed concerns about possible debt  overextension

extension beyond the normal limit for a joint, commonly causing sprain of its ligaments. twice as frequently as users of traditional home equity loans. Likewise, a higher proportion of credit line users cited cost (interest rate) as a disadvantage of this type of credit, probably reflecting simultaneously the sensitivity to prices of this upscale group of borrowers and the variable rates on most of these accounts.9

In sum, survey evidence suggests that holders of credit lines and users of closed-end loans represent different market segments, albeit with some similarities and overlaps. Credit line holders have somewhat higher incomes and more equity in their homes, but, so far at least, have borrowed less. Debt repayment and home improvement are the main uses of both kinds of loan, but the credit lines are also used more broadly for other purposes. Credit line holders are more likely to mention convenience as an advantage, but they also more often mention the cost in terms of variable interest rates and the risk of possible debt overextension as disadvantages.

Significantly, lack of knowledge about alternatives does not appear to be associated with the selection of loan type. The 1988 surveys show 9. Virtually all credit line accounts have a variable interest rate feature, typically one that allows monthly adjustments that are indexed to changes in the prime rate or to some other short-term money market rate.

Table : 1. Sources of home equity loans

Table : 2. Characteristics of homeowners, by debt status

Table : 3. Proportion of homeowners with home equity loans, by demographic characteristic

Table : 4. Outstanding balance on home equity loans

Table : 5. Purpose of home equity borrowing, by type of loan

Table : 6. Advantages and disadvantages cited by holders of home equity loans, by loan type that 92 percent of all homeowners are aware of that availability of traditional home equity loans, and 75 percent are aware of home equity lines of credit. In comparing the two types of credit, about 90 percent of users of each type were aware of the availability of the other product. But, despite their high levels of awareness, most users of either a traditional home equity loan or of a credit line account did not seriously consider the other type of credit instrument before obtaining their current loan. Among homeowners with a traditional home equity loan, only 16 percent considered obtaining a line of credit instead. Similarly, among homeowners with a credit line, only 20 percent considered taking out a traditional home equity loan. This lack of cross-product shopping likely reflects factors such as the differences in loan purpose discussed earlier. For instance, as previously noted, many credit line holders seem to have established their accounts as standby lines with no immediate use intended, and roughly three-quarters of them mentioned convenience (in one form or another) as a key advantage of that loan product.

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Hiring Super Sales People and Sales Managers

Hiring successful sales people and sales managers requires a scientific process, not a resume and interview ritual.  You’ve probably been fooled many times from a great impression at the interview, and then the person didn’t cut it.  S/he either quit, got fired or worse yet, s/he is still with you under producing.  Well these mistakes can be avoided, along with all the lost customers and associated expenses for training, salary, etc., by using my recruiting process.

 

The Science of Sales Person Selection

 

There are certain elements present and/or absent and/or mixed in proportions that determine selling and sales management success.  (See the White Paper described at the end of this article).  So in order to hire super sales people companies must:  Measure the amounts of each element; determine what mixes and what doesn’t; decide what can be changed or improved in the time allotted to change it; analyze findings; Interview candidates that tested positive and make your selection. 

 

This science is 96% accurate for selecting successful sales people for any industry.  That’s better than 9 super sales people for every 10 you choose.  Selling success means the person is an over-achiever and/or a top producer on your selling team.    Think of all the sales people you’ve hired and determine how many of them stayed with you and turned out to be top producers.

 

Selling Success Is Not a Personality Score

 

These elements are not to be confused with personality traits that are described and measured using a variety of personality tests – Meyers Briggs, DISC, etc.  These tests (although valuable for certain things) describe behavioral traits, but do not indicate (1) if a person can sell, (2) if a person wants to sell, (3) if a person has the skills to sell, and (4) if a person can sell for your company.  Now if you’re a CEO or sales manager in-need of someone to fill a selling void or generate needed sales, you’d like to know your selection has 1, 2, 3 and 4 and can hit the road running.

 

The Selling Success Elements

 

There are 4 critical strengths required for selling success – desire, commitment, outlook and accountability.  Commitment and desire are mandatory.  Outlook can be changed and accountability is manageable.

 

There are 5 weaknesses that everyone has.  The amounts and combination of these weaknesses will determine the overall effectiveness of the person.  That is; if someone is really flush with desire, commitment, outlook and accountability, but is encumbered with some or all of the weaknesses, his or her selling effectiveness will diminish proportionally.  The weaknesses relate to money sensitivity, need for approval, self image, personal buying traits, and emotional involvement.

 

Next are selling skills and a selling process that are more comprehensive than showing-up, presenting and expecting a purchase.  These include, getting to the right people, effective interviewing, fitting solutions to defined problems better than alternatives, securing commitment, managing accounts, prospecting, networking, territory development, and so on.

 

All of these strengths, weaknesses and skills can be measured either (1) in an interview by someone savvy questioning and listening for the elements – not many people are competent at doing this, or (2) from a test that gathers information, compiles it, gauges it and validates it regarding these strengths, weaknesses and skills.

 

Selling for Your Company

 

Obviously the person has to be able to sell, but whether or not someone can sell for your company will center on elements defining your type of sale – simple vs. complex; big ticket vs. small; titles the person has to connect to; highly competitive vs. specialty, etc.

 

Finally your type of management must be compared to the style that the person works best with – micro vs. macro management; coaching vs. left alone to survive; tolerant vs. nothing but results.  There are more, and all need to be compared – candidate to company.

 

What to Do to Assure Success

 

Although measuring the elements sounds like a lot of work, the task can be relatively simple.  Devise a test that measures these elements or use proven, existing ones.  Now if you get caught up in the cost of testing, just ask yourself what a failed sales person costs?  And if you get caught-up in the predictability, look to the longevity and satisfied users.

 

Unfortunately, measuring the elements is not all that’s required.  You will need to have a recruiting step.  That is, writing an ad that draws the right type of person and searching the various companies, websites, and other venues where your right person will be hanging around. 

 

This leads us to determining what the right person should look like.  What experiences, salary levels, and successes s/he should have.  Finally, your interviewing process must be set-up to see if chemistries match and to explore red flags indicated by the elements test.

 

This is the recruiting process and now I invite you to learn more about it.