Thomas Skiffington, CRS, GRI, CRB, ABR, ePro, CLHMS, SRES, RECS, CDPE, ECOBROKER
701 W. Market Street
Perkasie, PA 18944
Office Phone: 215-453-7653
Toll Free: 800-440-remax
September 7, 2012 3:40 pm
(ARA) - With short-term interest rates at historic lows, many investors are turning to “high-yield” bond funds to generate more income from their investment portfolios. They could make sense for you, too.
High-yield bonds are bonds issued by companies that do not carry investment-grade credit ratings. These companies often have higher-than-average levels of debt, suggesting that they are at greater risk of defaulting on their obligations to bondholders. To reward investors for taking that risk, companies pay higher rates of interest on their bonds. In late August, for example, when intermediate-term corporate bonds from investment-grade companies were yielding about 2.4 percent, high-yield bonds were offering about 7 percent.
Despite this riskier profile, high-yield bonds historically have had a relatively low default rate – about 4.4 percent annually, on average, over the past two and a half decades. For the first six months of this year, with corporate profits strong, the default rate was only 2.5 percent.
A mature marketplace
The market for high-yield bonds is larger and more diversified today than it was a few decades ago, when these securities were often referred to as “junk bonds.” It is now a $1 trillion-plus marketplace featuring bonds from companies in a wide range of industries, and broadly diversified in terms of credit quality. Rating agency Standard & Poor’s has a dozen different rating levels for high-yield issuers, ranging from “BB+” for those one notch below investment grade to “D” for those that have already defaulted on some of their financial commitments.
This diversity in today’s high-yield marketplace makes it easier for investors to manage default risk, since they can build portfolios of bonds in various industries and maturities across the credit spectrum.
Although high-yield bonds can fall in value when the economy weakens and investors start to worry about getting paid, those at the top of the ratings scale tend to fall the least. And they usually fluctuate less dramatically than stocks. In fact, research by Thrivent Financial analysts has shown that over the past 25 years the total return on high-yield bonds has been about equal to that of the Standard & Poor’s 500 Stock Index, but with only about two-thirds of the volatility.
“There are risks to investing in the high-yield market, just as there are risks in any market,” says Mark Simenstad, vice president and head of fixed-income funds for Thrivent Financial for Lutherans, a diversified financial services organization. “But it’s not a monolithic market. Many of the higher-quality bond issuers are established, well-known companies with good business prospects, which wasn’t always the case 20 or 30 years ago.”
Investing prudently in high-yield bonds
Beyond focusing on credit ratings, one of the simplest ways to minimize the risk of investing in high-yield bonds is through diversification. Instead of buying one bond, investors are encouraged to buy several issued by different companies in different industries. That way, one default can’t take down the entire portfolio. They also can incorporate other high-yielding assets into their holdings, including preferred stocks, convertible bonds and even mortgage-backed securities.
Unfortunately, assembling a diversified high-yield bond portfolio can be a tall order for many investors, who often don’t have the time or resources to assess the financial health and business prospects of many different issuers. Accordingly, most choose to invest via mutual funds specializing in that sector of the market, delegating security selection and trading decisions to a professional money manager.
Paul Ocenasek, manager of the Thrivent High Yield Fund, says high-yield bond funds can be appropriate for several types of investors. “They can certainly make sense for anyone looking to generate income from their investment portfolio,” he says, “since the yields they offer are often higher than what’s available from investment-grade corporate bonds, and typically higher than the yields on conservative cash investments.”
To be sure, high-yield bonds are not risk-free. They can go down in value when interest rates rise or when business conditions deteriorate and market sentiment sours. And, as noted, they can fall into default. But, Simenstad stresses, while investors should not ignore the risks associated with high-yield bonds, neither should they exaggerate them. A prudently managed high-yield bond fund, he maintains, can play a meaningful role in almost any broadly diversified investment portfolio.
Source: Thrivent Financial
September 7, 2012 3:40 pm
A: Some mortgages have prepayment penalties written into them. This means you will have to pay the lender a percentage of the principal, or some other stated amount, if you decide to repay the loan early.
The prepayment clause is usually in effect for only one to three years and may be waived for special circumstances. Lenders impose the penalty to recover any losses related to your early payment.
Ask about prepayment penalties before signing for a home loan. If you are applying for a new loan, the penalty should be disclosed in the truth-in-lending statement.
September 7, 2012 3:40 pm
Sad to say - but I have to draw attention to people being scammed by mortgage rescue schemes. Enter Tom Pool at the California Department of Real Estate (dre.ca.gov) whose office has issued a Consumer Alert to help Spanish-speaking consumers avoid falling victim to foreclosure rescue scams.
Pool's partner in crime solving, DRE Chief Counsel Wayne Belland says the typical scam involves the promise of a loan modification or other mortgage or foreclosure relief in exchange for an upfront fee, but once the fee is paid little or nothing is done to help the homeowner.
The warning provides these tips so homeowners can avoid mortgage relief scams:
Watch out for promises of guaranteed success. An ad on the television or radio, or in a newspaper, magazine or on the Internet, does not mean that what is advertised is lawful or truthful. No one can promise that a loan modification or other relief plan will be successful.
Do not place your trust in someone just because he or she speaks Spanish or may share the same or a similar background. A scammer will use a similar background and language to convince you to part with your money and/or property.
Never pay an upfront fee for loan modification services- they are illegal.
Never pay in cash, or wire cash to anyone who offers you home loan relief. With extremely limited exceptions, cash payments, and cash that has been wired, cannot be recovered.
Never transfer or sign your home over to any third party or anyone else who claims that such a transfer can or will help you repair your credit or keep you in your home. And do not make your home loan payments to anyone except your lender.
While the information comes out of Cali, it's mostly wise advice that can be applied anywhere in the nation. No matter where you live, get personalized advice on mortgage scams or the risks tied to your mortgage at no charge to you - by calling 1-888-995-HOPE, or online at www.hopenow.com.
September 7, 2012 3:40 pm
(ARA) – For homeowners looking to improve the value of their homes – and cope with the needs of multiple generations living under one roof – basement and garage renovations make sense. Both can enhance home value and add much-needed living space for less than one might spend on building an addition.
Basement and garage projects recoup 66.8 percent and 57.2 percent of their original costs, respectively, at the time of resale, according to Remodeling Magazine’s Cost vs. Value Report. And millions of American households now consist of multiple generations living under one roof, U.S. Census Bureau statistics show.
Before you dive into one of these worthwhile renovation projects, you should consider an often-overlooked logistic of working in a basement or garage – the concrete floor beneath the structure. Often, converting a basement or garage into usable living space involves adding plumbing for a bathroom or kitchenette. Usually, that means cutting into the concrete to install pipes, drains and storage tanks.
“Professional plumbers may regard digging through concrete as simply one of the hazards of their trade,” says Chris Peterson, West Coast regional sales manager for SFA Saniflo, which makes above-floor plumbing products. “But cutting through concrete is simply a bad idea whose time has long gone. There are some truly sobering hazards to ponder before homeowners agree to allow anyone to cut into the concrete floor of their basement or garage.”
* Cutting through concrete undermines the structural integrity of the slab, no matter how carefully the cut is made or patched. If the contractor fails to use the same or a better grade of concrete, the patched section will be weaker than the rest of the slab.
* Conditions are unpredictable. Plumbers won’t always know the depth of the concrete, whether rebar or tension cables are incorporated in it or what surface – sand, rocks or a ledge – is beneath it. Cutting into internal structures meant to strengthen the slab can further weaken it.
* No matter how careful a cut a contractor makes, edges can crack or crumble, and once a crack begins, it can extend across the entire slab, and even affect the footing or walls of the room.
* Once a stress crack evolves, it can allow radon and groundwater to seep in. Extended wet weather – the kind you get in the spring in many parts of the country – could be enough to allow water to leak into the structure.
* Breaking through concrete generates dust and noise – a lot of both. While the noise will stop once the cut is completed, the dust can linger much longer. Concrete dust is not like regular household dust; it’s thicker and particulate and can get into everything, including your heating, ventilation and cooling system.
Finally, the factor that can be the biggest issue of all for homeowners trying to keep a project on budget: cutting concrete can be very costly.
“The actual expense of cutting concrete depends on the size and complexity of the job, as well as the availability and rates of labor in your area,” Peterson says. “In some parts of the country, the per-foot rate may be a few hundred dollars, and $1,000 or more in others. If the job turns out to be harder and more time-consuming than he expected, or if he has to rent additional tools, a contractor will likely pass those cost-overruns on to the homeowner.”
So what’s the solution if you must add a bathroom or kitchen to your basement or garage renovation?
“Above-floor plumbing is a more cost-effective, time-friendly alternative to cutting through concrete and installing traditional below-floor plumbing,” Peterson points out.
Macerating – or up-flush – plumbing systems don’t require installers to cut through concrete or dig. The system can be installed right on top of the existing floor. Waste and water from a toilet, tub or sink is pumped through small-diameter piping, rather than flowing down like conventional plumbing. The up-flush system doesn’t store waste like a sewage ejector system; waste and water move to the septic or sewer system with every flush. Log on to www.saniflo.com to learn more about above-floor macerating systems.
September 7, 2012 3:40 pm
Giving your home a good cleaning doesn't have to be a big chore. You can make the whole house look and feel fresher by focusing on a few key areas.
Even if you vacuum regularly, floors and carpets could use a deep down cleaning now and then.
For carpeted areas - Start by vacuuming as usual, to pick up surface debris. Move as much furniture out of the room as possible. (If you can't move it, put some plastic under it to protect the legs.) If you don't want to rent a carpet cleaner, you can use a handheld electric spot scrubber to remove stains.
For hardwood or vinyl tile areas - Vacuum as usual. Remove as much furniture as possible. Use a steam mop to clean and sanitize the floor. Many models have triangular pads to help you get into corners and around furniture more easily.
For other tiled areas - If your tile is natural stone, treat stains based on type. If the stain is calcium based, from grout buildup, mineral deposits or hard water, use a pH balanced cleaner for stone.
Freshen up the bathroom with these simple cleaning tricks.
Take care of the tub by scrubbing with baking soda on a clean, damp sponge. Rinse, then wipe dry. You can clean and deodorize your vinyl shower curtain by giving it the same baking soda treatment.
Brighten up the bathroom by cleaning the window, mirrors, light fixtures and even the light bulbs with multipurpose surface wipes.
Take care of those areas that might not get daily attention.
Empty the refrigerator and toss anything out of date or that looks like a science experiment. Remove the shelves and bins, giving them a good cleaning with a solution of 1/4 cup multi-surface cleaner and one gallon of warm water. Rinse and dry thoroughly before putting them back.
Clean and sanitize surfaces that come into contact with food. To sanitize washable hard, nonporous surfaces such as granite, without damaging them, spray DuPont Sanitizer for Sealed Natural Stone. Spray until thoroughly wet and leave it for one minute.
Use a duster with a long handle to clean in higher areas, such as the tops of cabinets, ceiling corners, vents and recessed lighting fixtures.
Conquering clutter will make your home look better right away.
Divide and conquer - Sort items into piles for storing, donating or throwing away. When you've tossed the junk and donated designated items, it's time to start storing.
Give everything a home - Instead of putting things into whatever container you might have, look for storage containers to fit your particular needs. You can find flexible containers to slide under beds or fit into closet corners; clear totes to hold toys or larger items; divided drawer inserts to organize desk and "junk" drawers; and even attractive baskets and boxes that can store what you need while adding color and design to the room.
In order to keep your furniture looking its best, you need to do more than simply dust now and then.
For upholstered furniture - Vacuum upholstery and spot clean as needed. For leather pieces, you can get rid of old marks and stains with a specially formulated remover. Use oil-free leather cleaner and protector to keep the original look and feel of the leather.
For wood furniture - To remove grime and other residues, use a purifying wood cleaner, then follow up with a revitalizing furniture wood polish. It will help enhance and preserve the wood's natural beauty.
They take up a lot of real estate in the home -- make sure they're clean, too.
Washing machines can build up a sticky residue inside. If your machine does not have a specific washer cleaning cycle, add liquid chlorine bleach to the dispenser and run a normal cycle with hot water.
Check the drain area of your dishwasher and remove any bits of food or small items. Place a bowl, right side up, in the top rack and fill it with one cup of white vinegar. With nothing else inside, run the dishwasher on its shortest cycle to remove soap scum and hard water buildup.
Don't forget the outside of your appliances. For light cleaning, dilute 1/4 cup multi-purpose cleaner in a gallon of warm water. Wipe your washer, dryer and refrigerator clean. For tougher cleaning, use some full-strength multi-purpose cleaner directly on a sponge. Rinse surfaces thoroughly with plain water afterwards.
September 7, 2012 3:40 pm
Seller’s market. One with few sellers and many buyers.
September 4, 2012 5:30 pm
If your spare room or study is destined to become baby’s room soon, you may want to consider some of the latest trends in nursery design, where fashions change as frequently as in any other room of the house.
From major baby furniture and design professionals, here are the top ten new trends:
The old and the new – Some designers are mixing it up by setting a sleek, modern crib between two ornate period chairs spray–painted to match – or making an antique cradle the centerpiece in an ultra-contemporary setting.
Ditch the area rugs – Consider soft, vibrantly colored peel-and-stick floor tiles, which may be cleaned with a damp sponge and/or replaced as needed. Choose a single color or do something fun with alternating squares or patterns.
Try faux leather – One designer recommends gluing faux leather, available in many colors and patterns, on the sides of old baby furniture or even on the walls for a washable, practical designer look.
A second place to sleep – Practical designers are putting a crib and a bed in baby’s room. The bed is great for a visiting Grandma or a Mom who needs to crash in baby’s room once in a while. Later, simply remove the crib and your toddler is good to go.
Scrap the pastels – For a sleek look, use a dark wood crib with crisp white linens and matching dark wood furniture, some of which may be converted for later use.
Think orange – At least one designer has ditched pale pink or blue walls in favor of citrus-y, gender-neutral orange – with accents and furniture in white, grey, or aqua for a sweet, sophisticated look.
Comfy armchairs – Many Moms are ditching the rocker or glider for a plush, comfy armchair that will “grow” with the child – and be a favorite spot for story-reading.
Use real art – Hip designers are choosing real artwork – selected serigraphs, watercolors, even inexpensive originals instead of traditional A-B-C or baby animal wall décor. Or use kid-friendly maps and charts.
Bold light fixtures – Mobiles should not be the only thing baby can stare at. Choose bold, colorful or shiny Lucite light fixtures to add accent and interest.
Garden shop – Earthy designers are choosing white walls and furniture accented with bright garden colors and patterns – like blooming plants painted on the walls and flowery designs in pillows, curtains, and rugs.
September 4, 2012 5:30 pm
As autumn arrives, Americans shift their focus from sunny barbecues and beachside bonfires to raking leaves and picking apples. The dog days are gone, and the upcoming season promises new opportunities to spend time with friends and family. Unfortunately, it also promises a new set of issues for homeowners and car owners. There's no need for a total makeover, but careful homeowners should make a point to fall-proof their home, just as motorists maintain their vehicles.
Here are some projects to tackle now:
Clean your gutters. After a summer of scattered showers, it's a good idea to take a look around the roof for any leaks or cracks in the gutters. As autumn moves along, inspect them a few more times to make sure there isn't any foliage creating clogs. Stagnant water and falling leaves make for a mucky mix that could lead to foundation damage if left untouched. Be sure to check for any loose, broken or missing shingles, too.
Dust off the fireplace. Nothing beats the warm glow and homey scent of a well-stocked fireplace. Embrace those relaxing fireside evenings by clearing out any debris that might be left over from autumns past. Have the chimney cleaned at least once a year, and check for any nicks or cracks in it. Lastly, be sure to put up a screen to shield family members from any wayward sparks.
Shop for an insurance policy. The colder weather poses certain risks for homeowners both at home and on the road. With so many assets to protect, there's no need to settle for less than satisfactory home or auto coverage. Take a fresh look at your policies and premiums and make sure you've got the coverage you need without overpaying for it. Remember, you could receive a home-auto discount if you get both policies from the same carrier, so be sure to ask about that and other discounts.
September 4, 2012 5:30 pm
(ARA) – Those statistics about indoor air pollution and it’s relation to respiratory problems convinced you it was time to get your heating, ventilation and air conditioning system (HVAC) cleaned. You were even looking forward to the increased energy efficiency that a clean system can provide. But $49 and one very noisy service call later, you’re still sneezing and you haven’t seen any dip in your energy bill.
“A very low service charge may indicate the service provider isn’t performing a thorough cleaning and maintenance of your home’s entire HVAC system,” says Matt Mongiello, president of NADCA, the HVAC Inspection, Maintenance & Restoration Association. “He or she may have done nothing more than blow air through the ducts and clean off vent grills inside the home. A cleaning performed to NADCA standards – which are cited by the EPA as a best practice – encompasses much more than just the ductwork.”
HVAC companies are among the top 10 industries with the most complaints, according to the Better Business Bureau. So how can a homeowner know if a service provider is doing a good job, or just blowing hot air?
The EPA recommends you interview companies to ensure they have experience working on your type of system, that they will take steps to protect your home and everyone in it from contamination, and that they comply with NADCA’s air duct cleaning standards.
NADCA members carry general liability insurance, have at least one person on staff trained and certified as an Air Systems Cleaning Specialist, and clean and restore heating and cooling systems following the association’s standards and guidelines. A job done to NADCA standards should include:
A thorough inspection of the HVAC system before doing any work, and full disclosure of any problems discovered during the inspection.
- Examination of metal ductwork at several random sites to ensure the interior surfaces are free of visible debris.
- Cleaning of both the supply and return air ductwork.
- Removal, cleaning and resetting of all supply registers, return air grilles and diffusers.
- Cleaning of the supply and return air plenums.
- Inspection and/or installation of access panels.
- Cleaning of the air-stream side of the heat exchanger and cleaning of the secondary heat exchanger.
- Removal, cleaning and reassembly of the blower motor.
- Cleaning and inspection of the blower blades and blower compartment.
- Cleaning of the evaporator coil, drain and pan. If the cooling coil is clean, light should shine through it when you point a flashlight at the coils.
- Inspection and repair of the coil fins if needed.
- Replacement of air filters.
- Washing of the air cleaner.
While some companies may tout “duct-cleaning” for very low prices, be wary of these offers, Mongiello, advises. “A cleaning typically costs between $450 and $1,000 per heating and cooling system, depending on the services offered, the size of the system, how easily accessible it is, the climate in your region and how dirty it is,” he says.
Many of those variables will influence how long the job takes, too. Before you hire a contractor, contact at least two NADCA member companies to provide you with a time estimate for the job. “You’ll get an idea of how long the job should take,” Mongiello says. “But in general, a service provider who’s in and out of your home in an hour or less may be leaving out some steps that are necessary to do the job right.”
Finally, Mongiello advises, feel free to stick around while the technicians do their job. “As long as the homeowner’s presence isn’t compromising anyone’s safety, there’s no reason a consumer can’t observe how a job is done,” he says.
September 4, 2012 5:30 pm
Second mortgage. Lien on property that is subordinate to a first mortgage. In the event of default, the second mortgage is repaid after the first. Also called a junior mortgage, and in some circumstances a home equity loan.