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Buying & Selling real estate in Pennsylvania does not require an attorney, but as real estate attorneys, we have seen where there was a need, especially in today's market where it is more complicated than ever.

From that perspective we created the Real Estate Company of Lawyers Realty. The only real estate company in the area that provides the services of an attorney along with a Realtor.

Attorneys work along with your Lawyers Realty Realtor as a Team. This added value and protection does not cost anything additional to our buyers & sellers. It is just added Value & Protection.

For further information on Lawyers Realty visit our web site at
www.lawyersrealtypa.com or call to discuss your real estate needs with one of our Realtors (717) 364-3000.

Lawyers Realty, LLC


Friday, August 19, 2011

The Importance of Credit Scores in Real Estate

The search for a new home can be an exciting one; however, before you begin your quest for that dream home, your Realtor® would require that one of your first steps would be to meet with a mortgage lender.  This individual will help you determine the price range at which you should be looking, and at the end of the meeting, if all goes well, you should find yourself pre-qualified for a mortgage loan. 

What is one of the primary factors that go into a lender’s decision of whether or not to grant a loan?  Credit scores.  It has been estimated that nearly 75% of all mortgage loan decisions are made with the applicant’s credit score in mind.

The importance of credit scores in mortgage decisions and real estate transactions has risen over the past decades, and this is in large part due to what the lenders call risk-based mortgage pricing.  Essentially, the lender will make a decision on a mortgage based on how much risk is involved in the transaction.  If an individual has a credit score below 700 (which I’m sure none of you do), then that tells the lender that they are at higher risk of defaulting on their obligation to pay, and that will be reflected in the loan that they propose.  They may be offered a higher interest rate.

Now before you rush off to a free credit report website in a wave of panic, please keep in mind that a credit score is not a permanent and accurate representation of who you are as a person, and many mortgage lenders understand that.  It is important to find a lender who can see you as an individual with your own story.  That is not to say that you should ask them to completely disregard a credit score of 450 and give you a loan for that million dollar home, but there are some lenders out there who are willing to work with a low credit score, owing to the fact that you are not a number, but a person.  They will take into account things like your rental history.

That being said, it can’t hurt to try and raise your score before meeting with a lender, and there are many ways to do this.  Getting a credit card and keeping up with the payments is a quick and easy way to improve your credit and show lenders that you are serious.  In the end, that is all the lenders want.  They want to know that you are a responsible borrower and understand the value of a positive credit history, and a high credit score will give them a good first impression. 

Sunday, August 7, 2011

Mortgage Industry Adjusts as Real Estate Market Fluctuates: An Interview with Robyn Sealover

The following is an interview with Robyn Sealover, a mortgage specialist. Robyn has more than 20 years in the real estate industry including three and half years in the mortgage business.

Once someone has decided on a home to purchase, it’s time to secure a mortgage. Or is it? We often hear that one should be pre-qualified before searching? Is this true or does it vary? Please explain.

It is best to get pre-qualified before the search for a new home begins.  This will determine whether someone may be credit worthy as well as what price range they may be able to afford.  It will save the buyer as well as a realtor’s time ensuring that they are searching for an affordable home and not something that is ‘OUT’ of their price range and comfort zone.

It’s said that most mortgages are 30-year terms, although some are 15 or 21-year options. Do you recommend the 30-year or does it vary based on the individuals seeking a loan and/or the cost of the home and down payment?

While the majority of most loans are for 30 years, with interest rates being at all-time lows, it may make sense for borrowers to examine the possibility of shortening the term of a loan.  Each circumstance will vary depending upon how much a borrower can comfortably afford.   The payment for a 30 year mortgage would be less than a 15 year loan since the payment is condensed.  There are no 21 year mortgages.  There are 30, 25, 20, 15, and 10 year mortgages that are the norm.  The rates for a 30, 25, and 20 are usually very similar.  Most 15 & 10 year rates are lower. 

In “The Money Book for the Young, Fabulous and Broke,” Suze Orman says there are three different types of mortgages: fixed, adjustable and hybrid. She recommends hybrid mortgages for first-time buyers stating they are the best deal. First, can you explain the different types and second, in your opinion, is Orman on target with her recommendation of hybrid mortgages for first-time buyers?

I really value Suze Orman and think that she has done a fabulous job educating people on how to manage their finances and prepare for the future.  I truly recommend reading her books or watching her seminar.  While I value her opinion, I don’t recommend a hybrid mortgage.  This is an adjustable mortgage that may start with lower payments that are fixed but then amortize or adjust to a higher rate.  With the market being the way that it has been and interest rates at all-time lows, it would be wise to grab a low rate without the fear of the rate adjusting to a higher rate and payment. 

Orman also says homeowners typically stay put for only five to seven years. This seems like a short amount of time, especially considering that many have taken out 30-year mortgages. Why is this and what does it mean for mortgage lenders?

Most people do not stay in their first home since this is usually a smaller home or a “starter home.”  By using a 30 year mortgage, the payments would be lower.  When their income/family size increases, most plan on purchasing a larger home.  There is mobility in home purchasing but many have found the right home and will stay there for a lifetime and raise a family following the American dream.  It is a good idea to establish a relationship with a lender to determine when it may be a good time to move up or conversely down-size and help determine the correct payment plan.

Let’s talk interest rates. We’ve been hearing it’s at an “all–time low” for  about two years now along with a bunch of other things such as “now’s the time to buy.” What’s a “good rate” and what are the current rates for a mortgage right now?

We are currently experiencing historically LOW interest rates.  This really is a great time to buy.  Home prices have stabilized somewhat and we haven’t been as severely affected by the prices of homes in Central Pennsylvania.  This will enable a buyer to have more buying power…therefore getting more BANG for the buck!  It is hard to quote a rate though because there are so many variables.  It all depends on what credit score a borrower may have.  What their LTV or loan to value may be.  This means how much they may be investing in a purchase: what type of loan program may be used, where the home may be located, etc.  With so many variables, the rate is really case by case.  If you look at the stock market, you will see how the stocks go up and down constantly!  Any rate that is quoted to someone is like the stock market.  It will change frequently and is only effective when it is quoted.  The rates may change multiple times during the day. 

It used to be that many saved for a home and put 20% down. Is this still the case? If not, what’s the cause of the shift?

It is actually shifting back towards wanting to have more money available for the down payment.  There have been so many foreclosures, which has made making a mortgage purchase with less money down, more of a risk.  The risk factors are determined by looking at someone’s three credit scores.  The lower the credit score, the higher the risk.  There are still programs that you may be able to purchase with little money down, but once again, this is a case by case determination. 

What signs are you looking for that the real estate industry is recovering?

The real estate market is still floundering and trying to recover from some of the toughest years we have had in some time.  The effects of some poor investments may take quite a while before we can say that it has recovered.  The glut of foreclosed homes on the market has affected the price and value of many homes.  We have been fortunate that Central PA has not been as severely affected as some areas since this is a conservative area, but we have still seen some harder times.  People are more cautious before making a purchase and are trying to educate themselves.  This is a great thing.  A more educated purchase will ensure that a home owner is making a wise decision.  Purchasing a home is the biggest investment someone will make in their life so it is important to choose wisely.

Lawyer’s Realty is a one-stop shop for real estate transactions by including both a qualified legal representative and a real estate professional in the transaction.  How does this legal representation trickle down to the mortgage lender? Does it help make the process smoother? Please explain.

It does make things easier to be able to know that all parties involved in the purchase process are able to interact and communicate easily since the title, realtor, and attorneys are all available within one “house.”  A more cohesive transaction will help ensure that a purchase will run smoothly.