Some highlights from yesteday’s Federal Open Market Committee meeting: 

• “ Information received since the March meeting indicates that the economic recovery is proceeding at a moderate pace and overall conditions in the labor market are gradually improving.” 
• More importantly to those in the market for a mortgage (either to purchase a home or to refinance), the Committee decided to maintain its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of $600 billion of longer-term Treasury securities by the end of the quarter. 
• The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continue to anticipate that economic conditions…are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

As CapCenter evaluated the impact of these statements on the bond market, we determined that as of Thursday morning, April 28, we could could lower our rates just a tad.  This is great news for those who are in the process of refinancing or purchasing or selling a home.  Historically low rates are still available — but they won’t be around forever!

Many people are asking about private mortgage insurance due to concerns about the current market value of their homes.  Here are some important facts for you to know:

• If you put less than 20% down on a home loan, your lender will require Private Mortgage Insurance (PMI).  PMI protects the lender if you default on the loan.
• The Homeowners Protection Act of 1998 establishes rules for automatic termination and borrower-requested cancellation of PMI.
  • PMI must be terminated automatically when you reach 22% equity in your home based on the original property value IF your mortgage payments are current.
  • You may request the cancellation of PMI when you reach 20% equity in your home if your payments are current.
  • Borrowers must be told at closing and reminded once a year about PMI termination and cancellation.
• For many borrowers, PMI is tax deductible through 2011.  Here’s how it works:
  • Borrowers with adjusted gross incomes up to $100,000 may be able to deduct 100% of their 2011 premiums.
  • Deductions are phased out in 10% increments for borr0wers with adjusted gross incomes between $100,001 and $109,000.*

With rates STILL at (almost) historic lows, it might make sense to refinance even if PMI is required on your new loan.  Remember - it doesn’t stay on the loan for the entire loan term, but a lower interest rate will benefit you over the life of the entire loan.  Check with a CapCenter Loan Consultant to learn more.

* Borrowers should consult their tax advisers for applicability of this deduction to their specific circumstances.

Dust off the picnic table, folks.  Memorial Day is just around the corner which means it’s time to begin planning that wonderfully American tradition of grilling out. 

First and foremost, I’d like to get something out of the way.  While often called the backyard “barbecue,” Richmonders recognize this misnomer.  The word “barbecue” does not refer to an event.  It refers to a meat (usually pork) prepared a variety of different ways, but always cooked “low and slow.”  Say you’re hosting a ‘barbecue’ and you risk the ridicule of your guests.

Now that that’s covered, let’s talk about what’s important for your Memorial Day celebration.  Grill something.  Anything.  It doesn’t matter if its filet mignon or an Oscar Meyer wiener.  Seeing smoke rise from a grill is somehow reminiscent of the battlefields from whence this day came, reminding us that atop all things, Memorial Day is about saying “thanks.”  Have a moment of silence.  Remind your guests that the party was provided for by Americans willing to make the ultimate sacrifice for the ideals of a nation. 

Next, provide a game.  This decision should be made purely on taste, as backyard leisure sports require no real athleticism.  Options are as follows:

Badminton – The standard.  Easier than tennis.  Cooler than ping-pong.

Bocce ball – I know the name sounds Italian, but idea is as American as it gets.

Horseshoes – You’re going to have two very unsightly but worthwhile dead-spots in your yard.

Lawn Darts – If either alcohol or children will be present, disregard this option.

Cornhole – A hipper (and safer) alternative to horseshoes. 

While this may be the most important decision you make, don’t sweat it.  Any of these will surely be a hit.  Remember, the idea is to appreciate the moment. 

So ultimately, there are two takeaways from Memorial Day.  The first is to have fun.  Come on – You’re outside enjoying nature, friends, family, and maybe a cocktail.  Second, recognize that men and women have laid down their lives so that you may have that fun.   American soldiers have afforded you the right to eat that steak even though your doctor recommends against it.  It is a proud privilege to be American.   To all the men and women of the armed forces – Thank You.