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2007 Emerging Trends In Real Estate [ Download ] | 17.2MB

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How are Interest Rates Determined?

Buyer Tools

Four Things to Avoid When Purchasing a Home

Travis County Appraisal District

Williamson County Appraisal District

Market Data

School District Locator

How are Interest Rates Determined in the Market?
Interest rates on mortgages closely follow the bond market, more specifically, the 10-year Treasury bond. Bonds move in increments of 32nds, and they move every day. As the price, or change on these bonds go down, the yield and interest rates go up. Bonds down, rates up. For example, if the 10-year bond is down 16/32nds, discount points on a given interest rate will go up one-half a point (fractionally speaking, 16/32 equals one-half). As the change on these bonds go up, the yield and interest rates come down. Bonds up, rates down. For example, if the 10-year bonds are up 8/32nds, discount points are likely to fall one-quarter of a point. But what makes the bonds move? There are many global factors that we can't foresee, however, following the economic indicators in our own economy is usually a pretty sure bet.

Here's how it works. Each month the government releases economic indicators on the state of the economy, including many sectors; among them are housing, manufacturing, retail sales, inflation, and unemployment. Prior to the reports being released, bond traders have already formed a consensus or forecast for the indicators about to be released, and have bought or sold bonds to position themselves for the reports. In general, as the economy shows signs of strengthening, and a report is higher-than the forecast, bond prices will fall and interest rates will rise. An example of this would be if the unemployment rate dropped below forecasts, and retail sales were reported stronger-than-expected, interest rates would rise.

As indicators come out weak, or lower-than forecast, bond prices will rise and interest rates will fall. An example of this would be if factory production was forecast to rise 0.6% and it actually rose 0.2% less-than-expected, interest rates would drop. Therefore, in general, anything that indicates a weakening economy is good for interest rates. And anything that shows an expanding or growing economy is bad for interest rates.

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BUYER TOOLS

TOPICS:
• Mortgage Loan Analysis
• "Lock, Then Shop" Mortgage Loan Program
• Written Low Price Guarantee

Mortgage Loan Analysis
One of the first steps in considering the purchase of a new home is knowing just how much home you can afford to buy. We offer a program called the Mortgage Loan Analysis that not only estimates what that sum might be, but also tailors a mortgage financing package that specifically meets your needs.

We offer a broad selection of Conventional, FHA, and VA mortgage loan products including jumbo, conforming fixed rate, and adjustable rate mortgages, as well as many other innovative mortgage solutions.

It's a complimentary service, and using it can save you thousands of dollars per year. When you consider that many buyers will live with this financial commitment for up to 30 years, picking the right program for you is very important.

"Lock, Then Shop" Mortgage Loan Program
Our "Lock, Then Shop" Mortgage Loan Program allows you to lock in today's low mortgage interest rates now... before you sign a home purchase contract. It protects you against rising interest rates while you shop for that perfect home.

Here's how it works:

You make a full credit application with us for an agreed upon loan amount.
A standard loan application fee is collected.
Upon full credit approval, we will provide you a lock-in cap rate at our published Quote Sheet rate plus 1/2% up front fee for a period of 30 days based upon an agreed upon loan amount.
You will be given 30 days to provide Centerpoint with an executed sales contract.
Upon receipt of the executed sales contract, you have the one-time option of extending the original lock-in rate for 30 days, or floating down to the current Quote Sheet price, in the event interest rates are lower. The loan must be funded within the new 30-day lock period.
In the event that you do not qualify, we will reimburse you the unused portion of the application fee. If you receive credit approval, and then do not find a property or close with us as agreed, we will retain the unused portion of the application fee.
"Lock, Then Shop" is available on most Loan Programs.(ARM's excluded)

Written Low Price Guarantee
We can provide with you the lowest price in town to buy your new home because we have drastically reduced our interest rates.

To take advantage of this offer, make a loan application with us and we'll provide you with a written Interest Rate Lock-in Agreement and identify our closing costs in writing.

We're so confident that our rates and closing costs are so low, that we will give you a low price guarantee.

Should you find a lower price and closing costs, we will either match that deal or we'll gladly refund the loan application fee.

We only ask if you do find lower prices that you furnish the competitor's interest lock-in agreement and list of closing costs for a loan with the same terms and lock-in period within 24 hours of your loan application interview with us.

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Four Things To Avoid When Purchasing a Home
There are four major things to avoid doing before applying for a loan and during the loan process itself. Any one of these four things can greatly impact your ability to qualify for a mortgage loan so it is critical to avoid doing any of the following until AFTER your loan has closed:

1) DO NOT CHANGE JOBS
Changing jobs during the loan process can create a real problem in qualifying you for a loan, particularly if that job is in a different line of work or at a lower rate. During the loan process, it can also create delays as the new job will need to be verified. Please consult your loan officer before any changes are made.

2) DO NOT SWITCH BANKS OR MOVE YOUR MONEY AROUND
It is best to leave your money right where it is until your loan is closed. Moving your money to a new bank or even into a new account can wreck havoc with the verification process. Please consult your loan officer before any changes are made.

3) DO NOT PAY OFF BILLS
Your loan officer will advise you if it is necessary to pay off bills to help you qualify for a new loan. They will also show you the best way to pay off bills to make sure we have the evidence we need to prove that the bills have been paid.

4) DO NOT MAKE ANY MAJOR PURCHASES
Many borrowers make the mistake of buying a new car, some furniture or making another major purchase without realizing the impact it can have on their ability to buy a home. A large monthly payment can affect the amount of home you qualify for and the loan process itself may not be as smooth and successful as it should be.

If you must do any of the things listed above (even if you've just been pre-qualified for a loan) contact your loan officer. They can help you by re-qualifying you if necessary and advising you of your options. By avoiding these four things, you can look forward to a successful loan closing.

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