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Michael Gillis

Michael Gillis
701 W. Market Street  Perkasie  PA 18944
Phone:  215-469-0213
Office:  215-453-7653
Fax:  267-354-6911

My Blog

How to Conduct a Financial Spring Cleaning

March 8, 2012 6:52 am

While the focus in spring usually turns to shampooing the carpets and cleaning the drapes, the change in seasons also presents a good time to weed out and organize your finances. Jodi Helmer from CreditCards.com offers the following six steps for refreshing your financial life:
  1. Clear the clutter: The IRS requires taxpayers to maintain tax records for all income, deductions or credits claimed on their federal returns for at least three years. For all nondeductible expenses, Helmer says it’s ok to shred statements as soon as payment is posted to your account. Signing up for online statements and paying bills electronically will also reduce paper pileup but create electronic clutter. Be sure to back up all files stored electronically in case of a computer crash.
  2. Safeguard important documents: Financial documents such as savings bonds, life insurance policies, deeds and property titles and stock certificates should be stored in a fireproof safe or a safe deposit box at the bank. Create an inventory and formally authorize a trusted adviser or family member to get access to the material.
  3. Organize payments: Gather all recent credit card financial statements and list the amount owed on each one, along with minimum payments and interest rates. From there, establish a plan to pay off one card at a time. Though it's always fastest and most economical to pay off the highest-rate debt first, some people keep motivated by quickly paying off small debts completely, regardless of rate. Set up automatic payments for recurring bills such as car loans, the cable bill and your monthly mortgage.
  4. Consolidate accounts: Instead of keeping track of multiple credit card bills and statements from several checking, savings and investment accounts, consider which accounts could be closed or consolidated. Bigger investments draw better rates and juggling too many credit card accounts may make it easier to forget about payment due dates, increasing the likelihood of missed or overdue payments. Bear in mind that closing cards can temporarily trigger a decline in your credit rating. Be sure to hang on to your oldest cards as they provide a sustained track record.
  5. Shop for better interest rates: A little bit of research could net better rates on everything from your mortgage and car loan to your savings account. In comparing interest rates, read the fine print. For example, does a bank require a minimum balance to switch to a higher interest savings account? What are the terms and conditions linked to a zero percent card offer? What are the closing costs associated with refinancing a mortgage to a lower rate? Your credit card company may also be willing to grant an interest rate deduction.
  6. Assess current investments: Conduct an annual investment review. If you have an investment adviser, make an appointment to review your investment accounts. If you don’t have an adviser, consider hiring one. Your financial institution or employer may make referrals to financial advisers. If you're doing your own search, ask about education and experience as well as their fees. Planners may work on a fee basis, commission or a combination of both.
Source: CreditCards.com

Published with permission from RISMedia.

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Americans Not Maximizing Smartphones

March 8, 2012 6:52 am

While smartphones can perform a plethora of functions, according to a recent Harris Poll survey, very few smartphone owners are actually taking advantage of the time- and paper-saving potential of their devices.

Today’s smartphones can store information to make our lives more efficient – information that can be scanned to make a purchase, or displayed as a ticket for admission, allowing us freedom from printed confirmations and bulky wallets. However, when asked about a list of items that one could scan their mobile or smartphone for, only small minorities report having done so in each case.

According to the survey, only 5 percent of Americans say they have scanned their phone for admission to a movie or as an airline ticket, and fewer say they have done so to pay for clothing or electronics (3 percent), admission to a concert, live theater or performance (3 percent), to pay for a convenience item such as coffee (3 percent) or something else (7 percent). Two in five say they have never scanned their mobile or smartphone for any reason (40 percent) and slightly more say they do not have a mobile or smartphone with this capability (45 percent). Although Echo Boomers, aged 18-35, are most likely to have scanned their phone for all of the items listed, even they are not doing this at remarkable rates (between 5 percent and 10 percent for each item).

While few may be actively engaging with these functions, there is also a divide on the levels of comfort associated with these behaviors as well. Just under half of Americans (47 percent) say they are comfortable using a mobile scan as an admission ticket to movies, concerts or live theater performances, while 38 percent are not comfortable with it — with 25 percent not at all comfortable; 15 percent are not sure. About the same number of people are comfortable (41 percent) and not comfortable (43 percent) using a mobile scan as an airline, train or other transportation ticket; 15 percent are again, not sure.

Slightly fewer are comfortable using a mobile app that would allow them to make purchases at a retailer or company as they would with a gift card (39 percent) while 47 percent are not comfortable with this and 14 percent are not sure. The only item where a majority opinion is seen, is with using a mobile app that would store credit card information, allowing people to make purchases at a retailer or company as they would with a credit card; 63 percent are not comfortable with this with over two in five (45 percent) not at all comfortable. Only one quarter (24 percent) of Americans are comfortable with this, and 13 percent are not sure.

Looking at those who are comfortable with the various items, several noticeable trends emerge:
  • There is comfort in youth – younger adults are more comfortable than those older with each item listed.
  • Men are more comfortable with each item than are women.
  • Those who have scanned their smartphone for any one of a number of reasons are more comfortable with each capability than are those who have never scanned their phone, or do not have a phone with that technology.
According to Harris, the study implicates that, at the moment, technology capabilities are outpacing changing behavior—there are many new functions available that most people either haven't tried or admit to being uncomfortable with. While people like having the latest in technology, based on the wait lists and lines for newly released products, beyond early adopters, many people don't take advantage of the new functions available to them.

Published with permission from RISMedia.

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Prints and Patterns Dominate Spring Designs

March 7, 2012 6:50 am

Spring 2012 is the season of pattern and print, and designer Laura Ashley is right in step with this current trend. 

Not just for fabrics, print can be extended beautifully to both sofas and also to wallpaper, says the designer. Patterned wallpaper is a highly effective way of creating character, mood and atmosphere within a room with little effort. Bold and vivacious, it can make a wall the focal point of a room’s design.

Laura Ashley – well known for a bold use of print and pattern – offers a set of newly developed designs for spring and summer, drawing upon the quintessentially British theme of the Laura Ashley brand and modernizing it beyond a tradition of floral design.

"To the Manor Born" is a collection inspired by the well-worn and well-loved English country house; traditional with a modern edge. The fabric inspired by an archive print implemented 24 years ago, called "Summer Palace." The design has been infused with newly ripened colors, with a palette evocative of the jewel-like shades of cranberry red, emerald green and sapphire blue against clean, ivory backgrounds. The design has also been made matt, rather than having a silk and shiny finish. The overall effect is fresh and relaxed.

"The Darling Buds Bedroom" is another collection that will create new shades of spring and summer in the home. The design is inspired by splashy, watercolor floral prints. It is ideal for spring and highly feminine. Multi-colored with a focus on pretty, delicate floral prints, the palette highlights pinks, yellows and greens against crisp white - hitting the pastel notes of this spring's fashion. The key feature of this story is its hand painted look, delicate and ornate.

Spring’s new patterns and home furnishing design trends can help add a fresh look to your home for the warmer months ahead. 

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Simple Tips to Make Your Home a Vacation Destination

March 7, 2012 6:50 am

As the economy gradually recovers, millions of Americans will be staying closer to home this spring and summer. Now is the perfect time to start getting your outdoor space ready for fun at home. With a little hard work and advice from the experts at HouseLogic, homeowners can quickly and easily get their home and outdoor space summer-ready.

For homeowners who want to expand their living space, this may finally be the year to add a new deck. According to HouseLogic, choosing the right material is the most important decision you’ll make about decking. While synthetic decking materials, such as composite and PVC decking, and tropical hardwoods like mahogany are initially pricier, they are easier to maintain and can last years longer. Although traditional wood decks initially cost less, the annual cleaning and resealing maintenance can make them more expensive over the long term.

If your home already has a deck, it may simply need some care and maintenance. First, give your deck’s structure a close inspection for rotting or cracked boards. Pound in any protruding nails and cut back nearby trees or bushes to prevent mold and rotting. Then thoroughly sweep and wash the deck; after it’s completely dry, follow-up with a sealer or stain.

Pavers may be a good alternative to a deck and are available in many different colors and finishes. Choosing patio paving materials begins with a solid foundation—the base that supports the pavers must be firm, strong and designed to stand up to years of foot traffic and weather. When it comes to pavers, there are many options, including brick pavers, which offer warmth and the possibility of intricate patterns; concrete pavers, which come in countless shapes and sizes and can be fashioned to look like real stone; a variety of stone, slate and marble; and even recycled hardscape materials, such as concrete sections from a neighbor’s old driveway or sidewalk.

If you have a pool, you may want to consider alternatives to chlorine. Chlorine is popular because it’s inexpensive and keeps swimming pools clean by sanitizing, oxidizing and deterring algae; however it also has a strong odor, reddens eyes, and causes allergic reactions in some swimmers. Chlorine alternatives include bromine, ionizers, ozonators or PHMB; but all four have drawbacks, including higher costs. 

With your pool and outdoor space in top shape, gather your family and friends and start enjoying the warmer weather.

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FHA Announces Price Cuts to Encourage Streamline Refinancing

March 7, 2012 6:50 am

Acting Federal Housing (FHA) Commissioner Carol Galante has announced significant price cuts to FHA’s Streamline Refinance Program that could benefit millions of borrowers whose mortgages are currently insured by FHA. Beginning June 11, 2012, FHA will lower its Upfront Mortgage Insurance Premium (UFMIP) to just .01 percent and reduce its annual premium to .55 percent for certain FHA borrowers.

To qualify, borrowers must be current on their existing FHA-insured mortgages that were endorsed on or before May 31, 2009. Late last month, FHA also announced it will increase its upfront premiums on most other loans by 75 basis points to 1.75 percent. In addition, FHA will raise annual premiums 10 basis points and 35 basis points on mortgages higher than $625,500.

“This is one way that FHA can make a real difference to help homeowners who are doing the right thing, paying their bills on time and want to take advantage of today’s low interest rates,” said Galante. “By significantly reducing costs for these borrowers, we can make certain they cut their monthly mortgage burden, which will benefit the housing market and the broader economy in the process.”

Currently, 3.4 million households with loans endorsed on or before May 31, 2009, pay more than a five percent annual interest rate on their FHA-insured mortgages. By refinancing through this streamlined process, it’s estimated that the average qualified FHA-insured borrower will save approximately $3,000 a year or $250 per month. FHA’s new discounted prices assume no greater risk to its Mutual Mortgage Insurance (MMI) Fund and will allow many of these borrowers to refinance into a lower cost FHA-insured mortgage without requiring additional underwriting. FHA-insured homeowners should contact their existing lender to determine their eligibility.

Last month, the Obama Administration announced a broad package of actions and legislative proposals to help responsible homeowners save thousands of dollars through refinancing. This includes the changes announced today that will benefit current FHA borrowers –particularly those whose loan value may exceed the current value of their home. By lowering monthly mortgage costs for homeowners, FHA hopes to help more borrowers stay in their homes, thereby decreasing the potential for future default and reducing losses to the Mutual Mortgage Insurance (MMI) Fund.

The changes outlined in today’s mortgagee letter apply to all mortgages insured under FHA’s Single Family Mortgage Insurance Programs except:

- Title I
- Home Equity Conversion Mortgages (HECM)
- Section 247 (Hawaiian Homelands)
- Section 248 (Indian Reservations)
- Section 223(e) (Declining Neighborhoods)

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How to Buy an Energy-Efficient Appliance

March 6, 2012 6:50 am

When shopping for appliances, the least expensive product often seems like the best bet. However, the lowest-priced appliance may end up costing you more than an expensive one. The true cost of owning a home appliance actually has three components: the initial purchase price, the cost of repairs and maintenance, and the cost to operate it.

To figure out how much you'll spend over the lifetime of the appliance, you have to look at all these costs. The appliance with the lowest initial purchase price, or even the one with the best repair record, isn't necessarily the one that costs the least to operate. Here's an example of how an appliance's energy consumption can affect your out-of-pocket costs.

You can learn about the energy efficiency of an appliance that you're thinking about buying through the yellow-and-black EnergyGuide label it displays. The Federal Trade Commission's Appliance Labeling Rule requires appliance manufacturers to put these labels on:
  • Refrigerators, freezers, dishwashers, clothes washers
  • Water heaters, furnaces, boilers
  • Central air conditioners, room air conditioners, heat pumps
  • Pool heaters
When you shop for one of these appliances in a dealer's showroom, you should find the labels hanging on the inside of an appliance or secured to the outside. The law requires that the labels specify:
  • The capacity of the particular model
  • For refrigerators, freezers, dishwashers, clothes washers and water heaters, the estimated annual energy consumption of the model
  • For air conditioners, heat pumps, furnaces, boilers and pool heaters, the energy efficiency rating
  • The range of estimated annual energy consumption, or energy efficiency ratings, of comparable appliances.
Some appliances may also feature the EnergyStar logo, which means that the appliance is significantly more energy efficient than the average comparable model.

When shopping for an appliance, keep the following in mind:
  1. Select the size and style. Measure the space the appliance will occupy to be sure your new purchase will fit. Make sure that you'll have enough room to open the door or lid fully and enough clearance for ventilation. This may help you narrow your choices as you settle on the best capacity and style.
  2. Know where to shop. Appliance outlets, electronics stores and local retailers carry different brands and models. Dealers also sell appliances through print catalogs and the Internet.
  3. Compare the performance of different brands and models. Ask to see the manufacturer's product literature. Decide which features are important to you. Ask questions about how the different models operate: Are they noisy? What safety features do they have? What about repair histories? How much water do they use? How energy efficient are they?
  4. Estimate how much the appliance will cost to operate. The more energy an appliance uses, the more it will cost to run. Consult the EnergyGuide label to compare the energy use of different models. The difference on your monthly utility bill can be significant, especially when considered over the 10-to-20-year life of the appliance. You could save money over the long run by choosing a model that's more energy efficient, even if the purchase price is higher.
  5. Ask about special energy efficiency offers. Ask your salesperson or local utility about cash rebates, low-interest loans or other incentive programs in your area for energy-efficient product purchases - and how you can qualify.
Source: www.ftc.gov

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'Free Trials' May Not be Free

March 6, 2012 6:50 am

If you're interested in a particular product or service, trying before you buy might seem like a no-brainer. But what starts as a free trial—or for a very low cost—might end up costing you real money, according to the Federal Trade Commission (FTC). In fact, says the FTC, some companies use free trials to sign people up for more products.

No matter what the offer, all free trials eventually end. And typically, if you don't want to buy what you've tried, you need to cancel or take some other action before the trial is up. If you don't, you may be agreeing to buy more products.

But some dishonest businesses make it tough to cancel, hiding the terms and conditions of their offers in small type, using pre-checked sign-up boxes as the default setting online, and putting conditions on returns and cancellations that are so strict it could be next to impossible to stop the deliveries and the billing.

Or, the "free trial" might come with a small shipping and handling fee. You think you're only paying a couple of dollars, but you're really giving over your credit card information, resulting in much higher charges after the trial.

Other "free" offers enroll you in clubs or subscriptions. For example, a company might offer you an introductory package of free books, CDs, magazines or movies. If you sign up, you may be agreeing to enroll in a club that will send you more products and bill you until you cancel, or to a subscription that's automatically renewed each year.

The FTC advises taking the following steps to protect yourself from costly “free” offers:
  • Research the company online. See what other people are saying about the company's free trials—and its service. Complaints from other customers can tip you off to "catches" that might come with the trial.
  • Find the terms and conditions for the offer. That includes offers online, on TV, in the newspaper, or on the radio. If you can't find them or can't understand exactly what you're agreeing to, don't sign up.
  • Look for who's behind the offer. Just because you're buying something online from one company doesn't mean the offer or pop-up isn't from someone else.
  • Watch out for pre-checked boxes. If you sign up for a free trial online, look for already-checked boxes. That checkmark may give the company the green light to continue the offer past the free trial or sign you up for more products—only this time you have to pay.
  • Mark your calendar. Your free trial probably has a time limit. Once it passes without you telling the company to cancel your "order," you may be on the hook for more products.
  • Look for info on how you can cancel future shipments or services. If you don't want them, do you have to pay? Do you have a limited time to respond?
  • Read your credit and debit card statements. That way you'll know right away if you're being charged for something you didn't order.
If you see charges you didn't agree to, contact the company directly to sort out the situation. If that doesn't work, call your credit card company to dispute the charge. Ask the credit card company to reverse the charge because you didn't actively order the additional merchandise. Also, if you've been wrongly charged for a free trial offer, report it to the FTC at ftc.gov/complaint.

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Following Severe Weather, HUD Releases Disaster-Proofing Guide

March 6, 2012 6:50 am

Newport Partners, LLC, a Maryland-based consulting firm, recently announced the initial results of a U.S. Department of Housing and Urban Development-funded research project, “Safer, Stronger Homes: Protecting Your Risk During a Natural Disaster.” The how-to guide outlines simple, low-cost mitigation strategies for both builders and homebuyers alike to improve their home performance during natural disasters.

"Local building codes have improved dramatically over the past two decades, but as we witnessed recently with severe weather patterns, they cannot address everything that might go wrong in a home," said Jay Crandell, ARES Consulting and part of the Newport Partners project team. "This disaster-proofing guide will help builders and homebuyers fill some of the gaps by addressing known failures not typically addressed by code."

The strategies were highlighted at the National Association of Home Builders (NAHB) Codes and Standards Committee during the 2012 International Builders Show in Orlando.

Working with an expert advisory committee comprised of builders, engineers and code officials with direct experience with homes in natural disasters, the group identified 14 strategies that offer big payback for minimal investment, like better nailing patterns that can save homeowners thousands in damages.

The guide addresses four main disaster risks; winds, seismic forces, floods, and wind-driven rain that account for billions of dollars in home damage each year. The individual strategies are:
  • Wind-resistant roof configurations
  • Enhanced roof sheathing attachment
  • Wind and water-resistant roofing underlayment
  • Wind-resistant roof coverings
  • Improved gable overhang framing
  • Reinforced gable end wall construction
  • Improved siding and other exterior wall finishes
  • Enhanced wind pressure and rain-resistant window and door components
  • Roof ventilation practices to prevent wind-driven rain penetration
  • Enhanced water-resistive barrier and flashing practices
  • Reinforced continuous load path
  • Earthquake and wind-resistant chimneys
  • Extra-elevated foundations
  • Prevention of tree-fall damage with wind-resistant landscaping
For more information on the specific benefit and costs of the disaster mitigation strategies, and additional resources, please visit www.saferstrongerhomes.com.

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Home Builders Announce Housing Finance System Reform Plan

March 5, 2012 6:46 am

The National Association of Home Builders (NAHB) recently announced a new comprehensive framework for housing finance system reform that would transition Fannie Mae and Freddie Mac to a new mortgage securitization system for single-family and multifamily conventional mortgages.

“Our plan seeks to overhaul the housing finance system to ensure that housing credit is available and affordable in the future and is delivered through a competitive, efficient, sound, safe and stable system,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla.

To achieve this goal, Rutenberg said the system must include private, federal and state sources of housing capital; offer a reasonable menu of sound mortgage products for both single-family and multifamily housing that is governed by prudent underwriting standards and adequate oversight and regulation; and provide a federal backstop to ensure that 30-year, fixed-rate mortgages are available at reasonable interest rates and terms.

Replacing Fannie Mae and Freddie Mac with a new securitization system for conventional mortgages backed by private capital and a privately funded federal mortgage-backed securities fund must be done in an orderly fashion over time. During this phase-in period, Fannie Mae and Freddie Mac would remain operational until the alternative system is fully functioning.

Under this scenario, Fannie Mae and Freddie Mac would be gradually replaced by private housing finance entities (HFEs) that would be chartered to purchase single-family and multifamily mortgages from loan originators and package the loans into securities for sale to investors worldwide. The federal government would guarantee the securities, not the mortgages.

The HFEs would only purchase mortgages that are well understood and have reasonable risk characteristics, such as standard 30-year fixed-rate loans. The HFEs would operate under the oversight of a strong independent regulatory agency to ensure all aspects of safety and soundness. NAHB believes the 12 regional Federal Home Loan Banks could serve as HFEs.

Federal support to the conventional mortgage of the future would consist of a privately funded insurance fund where the government would guarantee its solvency in a manner similar to the Federal Deposit Insurance Corporation’s backing of the fund that insures savings deposits. Under this system, mortgage originators would pay premiums to capitalize the insurance fund, which would cover losses and ensure full payment to investors. The federal government would be required to pay investors only if the insurance fund was depleted.

NAHB’s housing finance reform blueprint also proposes to:

• Restart a carefully regulated fully private mortgage-backed securities system. NAHB believes reforms are needed in the system for rating mortgage-backed securities and is supporting the development of new securities ratings agencies that would use criteria developed by securities investors to assure objective evaluations and avoid conflicts of interest.

• Continue the role of the federal government housing agencies. The housing finance support roles of the Department of Housing and Urban Development, Federal Housing Administration, the Department of Veterans Affairs, the Department of Agriculture and the Government National Mortgage Association (Ginnie Mae) would be preserved.

• Enhance the position of state and local housing finance agencies (HFAs) as a source of housing funds. The HFAs should have a more prominent housing finance role through the development of original programs for new homes and multifamily rental units involving partnering with federal and private providers of housing capital.

• Expand the role of the Federal Home Loan Banks (FHLBanks) in the housing finance system. The FHLBanks should continue their current activities to serve as an ongoing liquidity source for institutions providing housing credit. Existing programs, such as the FHLBanks’ mortgage purchase programs, should be enhanced by allowing the banks to move beyond portfolio purchases to securitization.

• Repair flaws that produced the housing boom and bust. It is extremely important to continue and complete steps to close the gaps in standards and oversight that allowed and facilitated the improper and illegal activities in financial and mortgage markets. This should be done by undertaking a series of comprehensive reforms to ensure sound mortgage products and prudent underwriting; requiring sound mortgage securities structures and full transparency for investors; and imposing adequate oversight on previously unregulated segments of the mortgage and financial markets.

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Sustained Disposable Income Growth Needed to Keep Economic Recovery on Track

March 5, 2012 6:46 am

In the most recent issue of the “Lookout Report” - a biweekly research note from S&P Capital IQ's Global Market Intelligence (GMI) unit - analysts observe that more than any other single factor, the U.S. economy now requires sustained disposable income growth, coming from some combination of wage growth and tax policy, if the recovery is to remain on track and avoid recession. GMI Research has been closely following the U.S. employment situation and is monitoring discretionary consumer spending for signs of stress should retail gasoline prices exceed $4.00 per gallon.

Other findings from the report include:
• Overall, analysts in North America expect the S&P 500 Index to report very low growth of 0.82% in the first quarter of 2012, with a forecast of 3.26% growth for the consumer discretionary sector and 2.38% for the consumer staples sector.

• The dramatic increase in Apple's share price has generated interest in the latest of a long and fairly infrequent string of S&P 500 market capitalization leadership changes. Apple is the 11th issue to hold market capitalization leadership since 1926

• As the eurozone continues to struggle with its debt crisis, default risk, though moderating, remains built in to credit default swap (CDS) spreads for many of those sovereigns. But the risk premium in the five-year CDS for the U.S. has declined to levels not seen since mid-2010, which we think reflects the credit market's confidence in the U.S. economy.

• IPO activity increased in February as 17 offerings, excluding REITs and closed-end funds, were priced, raising $1.46 billion. Given the abundance of IPOs in the month, those recently priced issues found themselves among the performance leaders so far this year. Private equity-backed industrial machinery company Proto Labs Inc. now ranks as the top gainer among the early crop of 2012 IPOs, according to S&P Capital IQ.

• Commodity market performance and spiking petroleum prices in February have sparked uncertainty about early 2012 optimism as potential economic implications remain unclear. Industrial metals remained the best performing sector at the end of February, but petroleum prices have rallied, reintroducing geopolitical risk into the marketplace.

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