You know, with phrases such as the title above, and the myriad of paths the mortgage industry runs us down, it's no wonder that the average consumer becomes lost in the process. Then, the mortgage market adds this new little product called the interest only loan, and presto, further confusion. Add to this fact that the interest only loan option can be added to almost any mortgage product already in existence, and you have total chaos.
Well, let's take this puzzle apart, one piece at a time. The first piece to examine is the basic loan product: an Adjustable Rate Mortgage or ARM. An adjustable rate mortgage provides the consumer with a mortgage that allows the interest rate to be adjusted at mutually agreed upon times. This means for the consumer, if the interest rate goes down, they can get a better rate. For the lending institution it means if the interest rate goes up, they get a better return on their investment. It's usually a win-win situation. The consumer generally gets a better interest rate on the front end, with the assurance that is the interest rate doesn't just explode; they'll get to keep a great rate.
Now, a 5 year ARM means that the interest rate is locked in for five years. When you add the "1" to the equation, it means it's a 1% interest only ARM for 1 month; the interest only loan option at 1% is good for the first month, then the interest only option at a normal interest rate is due for the next five years of the loan, after that point in time, the interest rate may change, and the payments will begin to include principal and interest.
The only other element to define is the interest only loan option. On an interest only loan, only the interest is paid for a specified period of time. Nothing applies to the principal; the only part that the consumer pays of the mortgage loan is the interest. That is an interest only loan.
Okay, that makes it more easily understood. But is it a better deal for the consumer today? I am inclined to disagree that an interest only loan option is the best option for any consumer, other than just a small handful, and we're not discussing those borrowers in this article. The interest only loan, whether it's tied to an ARM, or an FRM, is never a good idea when you want to pay for your home, and retire in that same home. This type of consumer comprises about 65% of the market today. So, for the vast majority, an interest only loan of any kind is not your best bet.
Mega Millions 5 1
It's a fact that surfers prefer organic search results, which are the result of organic SEO methods, 5 to 1 over Paid Search engine advertising. I'm not saying this because I'm a firm believer in the long term benefits of SEO over SEM (even though I am), I'm saying it because it's true. PPC does have it's place in online marketing, but before I get into that, let me expound on my previous statement.
Why do people go to the organic listings before they go to the sponsor ads? It's very simple. People know that organic listings are more likely to have what they're looking for. Sites that are shown as a result of a search have creditability over paid listing sites. This is important to keep in mind, in addition to the fact that if your site ranks well organically, you will spend substantially less money on PPC and overall online marketing. I have a few clients that receive thousands of hits a day based solely on organic searches. These results, along with the ever-increasing cost of PPC advertising, make me wonder why more companies don't utilize organic SEO methods.
In regard to PPC, it's certainly an effective way to drive traffic to your site quickly. PPC campaigns are an excellent option for those waiting for a higher page rank or companies that sell high dollar items or have large profit margins. If your average sale is 5 dollars, you can't really afford to be paying much for an ad. If one average order can pay for an entire day's or even week's PPC budget, it's probably well worth the money. Unfortunately, a successful PPC campaign takes a lot more than money.
A successful PPC campaign is all about monitoring. Of the many subpar PPC campaigns I have "inherited" from frustrated site owners, roughly 80% were improperly monitored or tracked. Why is tracking so important? For one thing, without any sort of tracking, how will you know how much you are spending for a lead or a sale? Aside from not having tracking in place, many PPC managers bid on bad keywords, allow poorly written ads and utilize improper landing pages. Again, a successful PPC campaign takes a lot more than money.
Another thing many fail to realize when it comes to organic SEO and PPC is that one can be used to the advantage of the other. PPC can be used to test whether or not the keywords you are targeting are right for you. This works especially well for a company that has a unique service or product. Sometimes, traditional keywords or phrases are ineffective. PPC combined with tracking can help you determine if the keywords you are bidding on are converting. If they are, you can the create pages for the organic search which will hopefully alleviate your need for future PPC spending or at least curtail it significantly. There are also other ways to use PPC to "test" areas in which you could benefit from organic SEO, though many SEM firms will not tell you this. Why? Because they either don't know how to use PPC in this capacity or they want you to remain dependent on PPC for the life of your business. Not all, but many SEM firms view their clients much in the same way that high interest lenders view borrowers with good credit. They want you to stay put and throw your money out the window and will be more than happy to let you do so until you figure out that you don't have to.
The idea behind SEM is to help your ROI. Since I lean more toward SEO than SEM, I tend to use PPC as a way to test the market and to help new businesses bring in traffic. Ideally, organic SEO will help minimize the cost of PPC. It's my opinion that companies who focus solely on PPC are putting all their eggs in one basket and will always be dependent on their marketing budget. As PPC prices soar, so will your PPC expenses.
So, the next time you search for an SEM firm, ask how they can help you save money and achieve better results over the long term by incorporating organic SEO into your overall marketing strategy. If a 5 to 1 preference isn't a good enough reason to engage in organic SEO, then I don't know what is.
Both John Williams & Joe Balestrino - Mr Seo are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
