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Peter Cerruti
440 South West End Blvd, RT 309
Quakertown  PA 18951
 Phone: 215-429-7273
Office Phone: 215-538-4400
Fax: 267-354-6992 
petecerruti@yahoo.com
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Peter Cerruti

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Homeowners Ask: Will a Rise in the Key Interest Rate Impact My Mortgage Payment?

September 28, 2016 12:51 am


Approximately 90 million people could see an increase in their monthly debt payments, including their mortgages, should the Federal Reserve Board raise the key interest rate 0.25 percent, according to recently released research by TransUnion. Most of those people, however, would be able to afford the increase—in fact, 90 percent would see their debt payments go up by less than $10 per month, at an average $6.45.

“Most consumers have the financial capacity to absorb a $7 increase in their monthly payments, especially if they can plan ahead for the increased obligation,” said Nidhi Verma, senior director of Research and Consulting for TransUnion, in a statement.

Ten percent, however, do not. TransUnion researchers report that segment is susceptible to “payment shock,” a “change in monthly payment obligations.”

“Fortunately, we believe it is highly unlikely the Fed will raise rates more than 25 basis points at any one time over the near term,” said Verma. “This pace gives potentially impacted consumers an opportunity to adjust. In many cases, making minor changes to household spend would allow consumers to accommodate the payment shock.”

The key interest rate, or “benchmark,” informs the movement of mortgage rates, which, to date, remain attractively low.

Source: TransUnion

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Researchers: Retirement a 'Wobbly Three-Legged Stool'

September 27, 2016 12:51 am


Americans expect to encounter instability in retirement, as a “wobbly three-legged stool”—employer-sponsored benefits, personal savings and Social Security—teeters in the balance, according to recent research out of the Transamerica Center for Retirement Studies® (TCRS).

“Today's workers are grappling with retirement security and challenged by the wobbly three-legged stool comprising Social Security, employer-sponsored retirement benefits and personal savings,” explains Catherine Collinson, president of TCRS. “Although the Great Recession ended years ago, millions of Americans are still regaining their financial footing. As each year passes, people’s fears about our current retirement system come more sharply into focus.”

Seventy-one percent of Americans surveyed by TCRS expressed concern that Social Security will not be available when they are ready to retire, and just 16 percent “strongly” agreed that they are building a sustainable nest egg. Thirty-eight percent of those surveyed reported expecting to continue to work in retirement, while 15 percent reported that work will be their primary source of income.

“Amid retirement savings shortfalls, American workers are attempting to prop up our system’s three-legged stool by adding a fourth leg: working during retirement," Collinson says.

“Baby boomers’ vision can only be achieved if they are proactive about staying employable and if employment opportunities are available to them. As part of their retirement planning, baby boomers should create a ‘Plan B’ if retirement happens unexpectedly due to job loss, health issues, or other intervening circumstances,” adds Collinson.

Of the baby boomers surveyed by TCRS, 78 percent reported expecting retirement accounts (e.g., 401(k)s, 403(b)s, IRAs) to be their primary source of income in retirement; 34 percent are expecting Social Security to be the primary source; and 33 percent are expecting a pension plan to be the primary source.

Source: Transamerica Center for Retirement Studies® (TCRS)
 

Published with permission from RISMedia.


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FHFA Tosses Refinancing Lifeline to High-LTV Borrowers

September 27, 2016 12:51 am


Mortgage borrowers with high loan-to-value (LTV) ratios now have more options when it comes to refinancing.

The offering, recently announced by the Federal Housing Finance Agency (FHFA) and to be implemented by Fannie Mae and Freddie Mac (“the Enterprises”), will provide much-needed liquidity to borrowers current on their mortgage but unable to refinance through conventional programs because their LTV ratio exceeds the Enterprises’ maximum limits.

FHFA Director Mel Watt says providing a sustainable refinance opportunity for high-LTV borrowers who have demonstrated responsibility by remaining current on their mortgage makes financial sense, both for borrowers and for the Enterprises.

In order to qualify for the new offering, borrowers:

• Must not have missed any mortgage payments in the previous six months;
• Must not have missed more than one payment in the previous 12 months;
• Must have a source of income; and
• Must receive a benefit from the refinance, such as a reduction in their monthly mortgage payment.

Full details will be available in the coming months through the Enterprises, but the offering will make use of the lessons learned from the Home Affordable Refinance Program (HARP) and its streamlined approach to refinancing. The new offering is more targeted than HARP, but as with HARP, eligible borrowers are not subject to a minimum credit score, there is no maximum debt-to-income ratio or maximum LTV, and an appraisal often will not be required. Unlike HARP, however, there is no eligibility cut-off date. Borrowers with existing HARP loans are not eligible for the new offering unless they have refinanced out of HARP using one of the Enterprises traditional refinance products.

The new high-LTV refinance offering will be available to borrowers until October 2017.  For more information, visit HARP.gov, follow @FHFA on Twitter, LinkedIn and YouTube, or consult with a real estate professional.
 

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Teaching the Value of a Dollar: Average Allowances for Household Chores

September 27, 2016 12:51 am


One of the more effective methods of teaching financial responsibility to children is offering an allowance in exchange for household chores. Providing a reasonable amount, however, is key to ensure the child has a realistic understanding of “the value of a dollar.”

The going rates for the most common chores, according to the COUNTRY Financial Security Index, are:

Making the Bed - $1.18
Setting the Table - $1.31
Taking Out the Trash - $1.90
Doing the Dishes - $2.03
Cleaning the Bedroom - $2.07
Cleaning Surfaces - $2.20
Cleaning Floors/Vacuuming - $2.55
Taking Care of a Pet - $2.66
Cleaning a Common Area - $2.72
Doing Laundry - $2.82
Cleaning the Garage - $5.20
Mowing the Lawn - $6.28

When is the best time to start offering these allowances? Survey respondents say as early as age 5, and ideally when the child reaches age 8.

Source: COUNTRY Financial
 

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Flying Is Not Fun—but These Fail-Safe Tips Can Help

September 26, 2016 12:51 am


Flying is not fun.

That’s the consensus from a recent Consumer Reports survey assessing air travelers’ attitudes toward flying—in fact, zero of the airlines evaluated in the survey came close to receiving affirmative feedback across the board.

“It’s hard to imagine that there was a time when flying was fun, even glamorous, but today’s flyers face a labyrinth of fees and lackluster services,” said Mandy Walker, Consumer Reports’ Money Content Development senior editor, in a statement on the survey.

Survey feedback on coach/economy for American, Delta and United—the largest airlines in the U.S.—came in poor for factors such as cabin cleanliness, in-flight entertainment and refreshments.

Booking sites were not well-received among survey respondents, either. CheapOair.com, which touts inexpensive airfares, had the highest average fares and not one lowest fare when compared to the five other sites investigated by Consumer Reports.

“We recommend doing multiple searches over multiple days to increase your chances of finding the lowest fare—you will notice that persistence pays off in the quest for the best price on travel booking sites,” Walker said.

There’s a silver lining in the clouds: survey respondents gave Alaska Airlines, JetBlue, Southwest and Virgin America decent marks for coach/economy, citing ease of check-in and staff service.

Fliers should take these findings into account on their next excursion, according to Consumer Reports. Make the cabin a bit more comfortable with a blanket or sweater and noise-cancelling headphones, and keep a disinfectant on hand to reduce exposure to germs. Consider travel insurance, too, to protect your expense and possessions.

For more from the survey, visit ConsumerReports.org.

Source: Consumer Reports
 

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Study: Is Relocation the Solution for Houses Impacted by Climate Change?

September 26, 2016 12:51 am


Climate change threatens to reshape the residential development landscape—so much so that policymakers are exploring the possibility of relocating residences out of vulnerable areas.

Recent research out of the Lincoln Institute of Land Policy and the Regional Plan Association presents an option for residents in flood-prone areas, who will experience more impactful weather events as climate change progresses. That option, a managed retreat buyout program, detailed in “Buy-In for Buyouts: The Case for Managed Retreat from Flood Zones,” could “allow residents to forge new beginnings on safer ground and helps create public amenities by acquiring homes in the flood-prone areas and restoring the land to natural floodplain functions.”

Buyout programs are not novel. They are often overseen by the local municipality, though usually funded by federal grants from the U.S. Department of Housing and Urban Development (HUD) and the Federal Emergency Management Agency (FEMA). In most buyout scenarios, the municipality acquires properties from homeowners and converts them to “a less risky use, usually open space or parkland.”

The buyout solution proposed by the researchers aims to keep homeowners with federally subsidized flood insurance out of flood-prone areas—these subsidies will be phased out in the near-term, leading to spikes in premiums for some, the researchers point out. The benefits, they state, are manifold.

“Restricted land use coupled with new amenities can increase property values and, in turn, increase local revenue,” the researchers state. “If local governments plan properly, homeowners can relocate within the municipality and thereby maintain, and even enhance, the tax rolls.”

Asking homeowners or even entire neighborhoods to uproot is “is laden with social and political difficulties,” the researchers add, which is why many municipalities have dismissed managed retreat. The unavoidable impacts of climate change, however, beg otherwise. The researchers conclude a buyout program is one of the most prudent solutions.

Source: Lincoln Institute of Land Policy
 

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Kitchens in 2016: What's Hot and What's Not

September 26, 2016 12:51 am


The kitchen can be the highest selling point of a home, considerably contributing to its value. The hottest trends in kitchen design now, according to a recent Zillow Digs® forecast, are on-target for homebuyers in the marketplace today—and are worth considering if you’re planning to sell soon.

“Homeowners today want an open and thoughtfully designed kitchen that blends seamlessly with the rest of the home's design aesthetic,” says Kerrie Kelly, Zillow Digs home design expert. “From hidden appliances to beautifully painted cabinets in complementing colors, homeowners want their kitchen to be stylish enough for entertaining, yet welcoming and functional for everyday use.”

The Zillow Digs forecast pegs the hottest trends:

Hidden Appliances – More and more homeowners are tucking away appliances, integrating them seamlessly visually with surrounding cabinetry—think covered refrigerators or behind-closed-door microwaves.

Tuxedo Cabinetry – Tuxedo cabinets are two-toned—the top and bottom rows are painted in complementary colors, often white and black (like a tuxedo!) or white and soft gray, creating an open, yet grounded space.

Wood Paneling – The farmhouse aesthetic is as popular as ever, wood elements included. Wood paneling, especially shiplap painted white, has become more commonplace on backsplashes or ceilings.

What’s not hot? The Zillow Digs forecast reports:

Dark Colors – Dark wall paint and rich woods (like cherry cabinets) can make a kitchen feel cramped, even if the square footage says otherwise. Count on dark colors fading out in the next year or two.

Short Cabinetry– Cabinets that stop just short of the ceiling are on their way out, and cabinets flush with the ceiling are on their way in—the latter adding height and openness.

Speckled Granite – Granite countertops were once the mainstay, but with more, low-maintenance options now available (like butcher block, marble and quartz), granite (specifically speckled) will be retired soon.

Source: Zillow Digs®
 

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5 BBQ Tips for a Low-Cal Tailgate

September 24, 2016 12:51 am


Football season’s here, which means meals on Sundays (and Mondays and Thursdays!) are anything but low-cal. Too many cheat days coupled with limited movement (we understand—you can’t miss a minute!) can pack on the pounds, fast.

The good news is you can have a tasty tailgate, without all the calories. Swap loading up on beer, brisket and buffalo dip for these healthy barbecue tips, courtesy of the Hearth, Patio & Barbecue Association (HPBA):

Eat Your Veggies… – Most vegetables can be grilled, imparting that same smoky flavor of barbecued meats with half the calories. To coax the most out of veggies, sear them over high heat, then finish them off on the top rack of the grill.

Season Right – Harvest season, that is! Pick up fresh produce for the grill at a farmers’ market each week. Barbecue it as soon as possible to maintain the just-picked taste.

…and Your Chips… – Apple- or cherry-flavored barbecuing chips can inject serious flavor into foods without the additional calories of marinades or oils. Try them out at the next tailgate—simply add them to the flame to reap their benefits.

Control Portions – Even healthy eats should be consumed in moderation. Skewer small portions of fruit, poultry, seafood or veggies to make kabobs—this will help keep portions in check.

…and Your Dessert – Grilling fruit brings out its natural sweetness. Try grilled mangoes, peaches, or whatever else is in season—don’t be afraid to experiment!

Source: Hearth, Patio & Barbecue Association (HPBA)
 

Published with permission from RISMedia.


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Cutting 'Ma Bell's' Cord: Does Your House Need a Landline?

September 24, 2016 12:51 am


Most homeowners are cutting the cord—to their landline, that is. With wireless present in most households and smartphones at hand on the go, the case for the landline has become near-obsolete.

Some homeowners, still, appreciate the added convenience and security of having a landline. According to Jason Steele of MoneyCrashers.com, many homeowners have made the switch to Voice Over Internet Protocol (VoIP), which transmits calls over a digital connection, combining the best of both landline and wireless.

Steele says while first-generation VoIP providers, such as Vonage and Lingo, offer a free router and charge a monthly fee, second-generation VoIP providers, including Magic Jack and Ooma, are becoming just as popular. The main differences between the first and second generations, according to Steele, are hardware and pricing structure.

An alternative to VoIP is landline service through a wireless carrier, such as Verizon or Straight Talk, Erica Manfred of SeniorPlanet.org offers. These plans, which are inexpensive, tie a cellular signal to cordless home phones. A special reception device that hooks into the cordless phones or multi-phone base station is required for the service.

Manfred says Straight Talk sells its device for $69.99 new or $15 refurbished, with a monthly service fee of $15, while Verizon's device is free to new customers, with a fee of $20 per month. Both carriers let you keep your current number.

Should you cut the cord? According to Michael Crider of DigitalTrend.com, consider first what you need: something to replace a landline? Something to make phone calls from your laptop? Something that shares a single phone line between your home phone and cell phone?

It’s all possible. For frequent international callers, for instance, Lingo mixes a VoIP service with an unlimited plan, Crider explains. Skype, Vonage and Ooma offer home and business-class options, with more features for additional rates. Vonage is probably best for home users who want a landline alternative, Crider recommends, while Skype is preferable for businesses who want complete VoIP and teleconferencing service.

Have you cut the cord in your house?
 

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Mortgage Rates Decline Post-Fed Action

September 24, 2016 12:51 am


Average mortgage rates have declined following the Federal Reserve’s decision to postpone a rate hike, reversing upward movement from last week, according to Freddie Mac’s recent Primary Mortgage Market Survey® (PMMS®). Per the survey, the 30-year fixed-rate mortgage (FRM) averages 3.48 percent, with an average 0.6 point.

“The 10-year Treasury yield declined after last week’s post-Brexit high in anticipation of the Fed’s September policy meeting,” says Freddie Mac Chief Economist Sean Becketti. “The 30-year fixed-rate mortgage followed Treasury yields, falling two basis points and settling at 3.48 percent.”

The 15-year FRM, according to the survey, averages 2.76 percent with an average 0.5 point. The 5-year Treasury-indexed hybrid adjustable rate mortgage (ARM) averages 2.80 percent with an average 0.5 point.

“Despite the decrease in rates, the Refinance Index plunged 8 percent to its lowest level since June,” Becketti adds.

Source: Freddie Mac
 

Published with permission from RISMedia.


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