Real Estate Information Archive

When purchasing a home, the many different loan options available to you can be a bit overwhelming. With different names, various term lengths and many other factors on the table, it can be confusing trying to figure out which loan is best for you. While your mortgage lender and your Realtor can both answer questions you may have, it’s still smart to do your own research so that you have a basic understanding of mortgage loans.

Let’s focus on the two major options that affect your mortgage: the term of the loan and the type of interest rate attached to it. The term of the loan is the amount of time you have to pay it off.  Two of the most common loan terms are 15-year and 30-year loans. There are pros and cons to both. In addition, there are two types of interest rates to choose from: a fixed-rate or an adjustable-rate. Each type of loan combination has perks that meet your specific needs and will determine your monthly payment and the total interest you will pay.

First we will look at a 15-year fixed-rate mortgage loan.

This is a loan that you pay back over 15 years with the same interest rate throughout the life of the loan. One of the biggest benefits of a 15-year fixed-rate mortgage loan is that you will pay it off in half the time of a 30-year loan. Obvious, right? But what you may not realize is that you will also be paying less toward interest AND you will be building equity more quickly.  Paying your loan off faster means being able to use your hard-earned money for other things like retirement savings, college tuition for children, travel etc. However, while having a shorter term will often garner a lower interest rate, it still likely means higher monthly payments. And that is something you need to think about when deciding what kind of loan to pursue. For example, say your loan amount is $184,000 and you have a fixed interest rate of 7%.  You will pay about $1,650 a month with a 15-year loan verses about $1,220 a month with a 30-year term.  Since your payment will be lower with a 30-year loan, you might be able to qualify for a larger amount if you choose the loan with the longer term.

Shorter term loans usually have lower interest rates. This is because the lender is taking on less risk when money is borrowed for a shorter amount of time and they are able to get their interest back sooner. Locking into an interest rate with a  fixed-rate loan means you will pay at that interest rate for the entirety of your loan term. Since rates fluctuate daily, this is a good thing. However, there is always a chance that interest rates could drop lower than your rate, in which case an adjustable-rate mortgage might be beneficial. Adjustable-rate loans are risky though, because your rate could also go much higher meaning higher monthly payments and more interest paid throughout the life of the loan. The main reason to think about getting an adjustable-rate mortgage loan is to get a lower monthly payment. Since you are taking on the risk of rates rising, the bank will often reward you with a low rate starting out.

Now, let’s look at a 30-year mortgage loan. 

This is a home loan that will be paid off completely in 30 years as long as every payment is made as scheduled. Most 30-year mortgages are fixed-rate loans, meaning the interest rate will stay the same throughout the life of the loan. When you take out a 30-year loan, you may qualify for a higher amount than you would with a 15-year term. In addition, you will have lower monthly payments, making a more expensive home affordable for you. You also will enjoy the flexibility of being able to pay the loan off faster by adding to your monthly payment or making extra payments. But you can always go back to your regular payment when you can’t afford to do more. It’s easier to qualify for a 30-year loan and with the lower payments, you might have money left over each month for other things like savings, travel, etc. Just keep in mind that with a 30-year mortgage you will likely be paying a higher interest rate as well as more interest over the years, and you won’t be building equity as fast as you would with a 15-year mortgage.

Choosing what mortgage works best for you is a personal decision based on your needs.  Again, your mortgage lender and Realtor can help you do the math to determine what type of loan is going to give you the best outcome.

If you are in the market to buy or sell a home (or both), let me, Sandra Nickel, and my Hat Team of Professionals assist you with all your real estate needs! Call us today at 334-834-1500 and check out https://www.homesforsaleinmontgomeryalabama.com for more information.

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If you are in the market to purchase a home right now, I am sure you would like to be moved in and settled by the time the holidays arrive.  Does that sound too good to be true?  Well, no promises, but there are steps you can take to buy a home fast.

Whether you are buying a house for the first time, or you have navigated the home buying process before, chances are you know that it can be lengthy and complicated.  But there are certain strategies you can use that will speed things up. Here are some tips to help you get started:

• Chose the right type of house.  There are certain types of homes you will want to avoid if you’re in a hurry.  Co-ops, for example, can be problematic because it can take six to eight weeks to get a board interview scheduled, finalized and approved.  You should also avoid bank-owned homes or foreclosures, which generally take much longer to close.  The fastest way to go is to focus on condos or new developments. Closings for condos and new developments can take as few as three to four weeks to happen.
   
• Get pre-approved for a mortgage.  This is a strategic move that will give you a head start so that when you do find a house you want to purchase; you will already be approved for a mortgage loan and can make an offer right away.  This will also help you to stay within your budget when looking at homes because you won’t want to waste time looking at properties that cost more than what you are pre-approved for. How to Get a Mortgage Pre-Approval
   
• Have your documents in order and ready to go.  Get all the paper work that you will need organized so that it is ready and waiting when you find the right home.  Generally, a home buyer will need the following: federal tax returns for the past two years, supporting information such as W-2, 1099, or other tax forms for the past two years, two months’ worth of bank statements for your checking, savings, 401K, retirement and other accounts, and pay stubs from the past month. Homebuyers: What to Bring to Your Closing
   
• Find the right Realtor to guide you through the process.  You will want an experienced, professional Realtor like Sandra Nickel who knows the area well and can use their expertise to get you into a home quickly.
   
• Offer to shorten contingency deadlines.  Don’t risk waiving home inspection or financing contingencies, but consider a shorter time frame to effect a faster closing.
   
• Be prepared for your move.  Don’t wait until you have closed on your new home to start packing and preparing for your move.  Start early so that as soon as you close, you are ready to go!

If you are in the market to buy or sell a home, let Sandra Nickel and her Hat Team of Professionals assist you with all your real estate needs!  Call them today at 334-834-1500!

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When you are purchasing a home, especially if you are a first-time homebuyer, it’s easy to become overwhelmed by all the things you need to think about.  Something like title insurance is probably not even on your radar. It’s a fee that will appear on your closing document and chances are you don’t even know what it’s for.  If that’s the case, we’ve got you covered.  Here are five things you need to know about title insurance:

1. Like other insurance policies, title insurance is something that protects you financially should there be a loss.  In this case it protects you with regard to property ownership. It not only ensures that the property you are purchasing will be legally transferred to you from the previous owner, it also protects you from possible future Title Defects.  There isn’t a monthly premium with title insurance; it is a one-time fee paid at closing.  This one-time payment will protect the insured from title defects for the life of the loan.
2. Title insurance is important because while a title research company will look into the history of ownership of the home to be sure there are no title defects, there is always a possibility that an issue could arise later due to several reasons such as improperly recorded documents, mistakes in ownership history or other legal matters that occurred prior to your purchase of the home.
3. There are two types of title insurance; one that protects the home owner and one that protects the mortgage lender.  Your lender will require that you purchase the lender’s policy to protect them from any loss should a problem arise.  The owner policy protects you and will cover legal fees or other losses that occur due to a title defect. You are not required to get an owner policy, but it’s well worth it to have it in place just in case something goes wrong in the future.
4. It can be frustrating to pay for insurance that you might never use, but it is risky to not have it in place. Think of it as paying for peace of mind.  With title insurance, you will be protected from catastrophic circumstances should a title defect be found.  You could not only lose a lot of money; you may even lose your home.
5. Title insurance is purchased when closing on your home. You have the option of buying it from whatever company you choose, but if your lender has a preferred company, you may find it less expensive to add your owner’s policy onto your lender’s policy. Average Cost of Title Insurance 2019

If you are in the market to sell or buy a home, let Sandra Nickel and her Hat Team of professionals assist you with all your real estate needs!  Call them today at 334-834-1500!

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Coming up with the money needed for a down payment on a house is not easy for many people.  Some are lucky enough to have someone (or several people) give them cash as a gift to go towards purchasing a home.  No doubt, that is a wonderful thing!  But there are guidelines that must be followed when using financial gifts for your down payment.

Using gifted funds to buy a home is not as simple as it sounds.  First, the money can’t come from just anyone.  Lenders want the money to come from a family member, such as a parent, grandparent or sibling.  You can also receive gifts from your spouse, domestic partner or significant other if you’re engaged to be married.

You may or may not be able to use gifted money for your entire down payment. It depends on the type of loan you are seeking.  If you are taking out a conventional loan, all your down payment can come from a gift, if you are putting down 20 percent or more.  If you are putting down less than 20 percent, you must include some money of your own.  With FHA and VA loans, the entire amount can be gifted unless your credit score is less than 620, in which case you will have to come up with 3.5 percent of the down payment yourself. No matter what type of loan you apply for, you can only use gifted funds to purchase a primary residence or a second home.

In addition to there being restrictions about who can give you money, you will also have to prove that the money is a gift.  You will need to provide a gift letter that includes the name of the donor, their relationship to you, the date and amount of the gift and a statement that says the money is given with no expectation of repayment.  Both you and the donor must sign the letter. 

While it’s not necessary, it is a good idea to have the gift in your bank account prior to applying for a loan. That way when your lender looks through your bank statements for the previous few months, they will already see documentation of the gift.

If someone has given you money to go toward a down payment, Sandra Nickel and her Hat Team of real estate professionals can help you find your dream house.  Give them a call today at 334-834-1500!

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With all the fees and expenses involved in purchasing a home, it may be tempting to skip the  home inspection to avoid spending the money.  But in the long run, it may cost you more to skip it.  Home inspections sometimes reveal things that ultimately could have cost you way more than the fee involved.

While you might believe that sellers are being honest about the condition of the home, it’s important not to take their word for it.  Truthfully, they probably are being honest.  But they don’t necessarily see what could be “wrong” with the house any more than you do.  That’s why you need an expert to come in and do the inspection. They can find things that never would be noticed by the naked eye because they know what to look for. Home inspectors can also give you advice and things to look out for in the future. With that information, you can have an idea of how to prepare for potential costs down the road.

A home inspection can be a deal breaker as well.  For example, if sellers offer a discounted price or cash back for skipping the inspection, walk away from the deal.  This is a huge red flag!  A home inspection only takes a few hours and is paid for by buyers, so there is no reason sellers should protest unless there are critical issues in the home they know about and are trying to hide.

When hiring a home inspector, you want someone with many years of experience and proper certifications and licenses. You also want someone who will be thorough…willing to go through the basement, attic and up on the roof to check out every nook and cranny of the home.  It’s important to gather as much information about the house as possible so that you know what you are getting in to.

It is not mandatory for you to be present for the inspection, but it’s a good idea to be there.  Some inspectors are happy to have you walk along with them and ask questions as you go.  Others will want to do the inspection on their own and then have you do a walk through with them after they are done.  Either way, be sure to look carefully through the report they give you and ask as many questions as you want.  Remember that you are paying for their time, so don’t hesitate to have them go over the report with you so that you have a clear understanding of it.

Even if your inspection comes up clean, the fee you pay is worth the price to have peace of mind. Include it in your home-buying budget and don’t think of it as an “extra” expense.  It is a crucial element of your decision in purchasing the home and paying a $450 fee and finding nothing wrong is better than skipping it and ending up having to spend thousands to repair something! 

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As a real estate agent, I love helping people purchase their first home.  However, there are two major challenges that I see time and time again with first time home buyers:

1. They often carry too much debt.
2. They don’t have enough cash for a down payment.

These two issues are strongly related in that people need to reduce debts that inhibit them from saving money.

We all know that we shouldn’t spend more than we earn, but falling into the debt trap is easy to do.  You see a pair of boots that you must have and you think, I will use my credit card now and pay for them with my next paycheck.  It sounds reasonable at the time, but next thing you know you’ve done something like that often enough that there is a beastly credit card balance hanging over your head.

So, now you’re in debt.  You have regrets, but no use doing the “should have, would have, could have” dance.  Now it’s time to move forward and take the steps needed to reduce your debt.  Here is a list of things to do to change the way you manage your money.  Follow these steps and before you know it you will be on your way to saving for a down payment on your first home!

1. Stop adding to your debt. The first step to getting out of debt is to stop adding to your outstanding balances. To remove temptation, carry only one credit card with you…and make sure it is the one with the lowest limit so that it is impossible to get into serious trouble with it.  Leave any other credit cards in a safe place at home to keep yourself from going on an impulsive shopping spree. 
2. Take an inventory of your spending habits. This may not be a fun activity, but it is helpful to see how you are spending.  Create a list of where your money goes each month including rent, utilities, car payments, food, credit cards etc. Once you have done this, split the list into two categories: bills you must pay every month and debts you need to pay off.  The second list then can be organized in order of urgency, either based on outstanding balance or highest interest rate.  Now you will have a clear picture of your debt situation. Financial Inventory
3. Eliminate the largest debts first. Make a minimum payment for each of your credit card bills, but then make an extra payment on the bill that is at the top of your list. Do this monthly until that bill is paid in full.  Now take the money you were using for that bill and start applying it to the second item on your list.  Continue this until all of them are paid off. 
4. Cutting expenses and making the payment.  If you are already in debt, how are you going to find money for an extra payment?  Well, some sacrifices will have to be made.  Cutting back on extras like trips to Starbucks, entertainment and eating out can free up cash that can go toward that extra payment each month.  Cutting Monthly Expenses
5. Prepare for the Unexpected. Sometimes life is a struggle and unexpected challenges such as car repairs or medical expenses will pop up from time to time.  As you cut expenses and start to save money, set up an emergency savings account just for these occasions.  That way you will be prepared and won’t have to use a credit card and add to your debt.
6. Lower your interest rates. Give your credit card company a call to see if they will lower your interest rate. If they say no, shop around for a card with a lower rate and transfer your debt (be careful of transfer fees to make sure the transfer benefits you). You can also seek out a consolidation loan from your bank. They will pay off your debt and you can pay them back at a lower interest rate. How to Lower Your Credit Card Interest Rate
7. Stick to it!  As you see your debt decrease and see your cash increase, don’t fall back into old spending habits. As you have more money available, put it right into your savings and soon you will have the money you need for a down payment on your first home!

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With interest rates still relatively low, now is the time to start your search for a new home. Here are some tips to help you find your dream home:

• Make a list of priorities.  Ideally, your dream home would have everything you want in it, but it’s still a good idea to make a list of what you want in order of importance to you. What are you most concerned about?  Location? Square footage?  Private backyard? You may have to give up one thing to get another, so you want to be prepared with your priorities so you will know what is non-negotiable for you.  Also, think about desires verses needs when making your list.  For example, a home might not have the vaulted ceilings that you love, but meets your needs and wants in every other way. Those vaulted ceilings are a “want” more than a “need”.
• Think ahead.  How long do you plan to live in the home?  If you are single or newly married you may want a starter home that you will only stay in for a few years while you save for a larger home.  But if you are expanding your family or planning to work from home, make sure you factor in the space that you will need.  Don’t buy a house that will only suit your needs for a year if you think you may live there for ten years.  There is always the chance that things will change, but plan for what you know for sure now.
• Decide on your “most lived in” spaces. Where do you spend the most time in your current home?  If you love to cook, chances are the kitchen is going to be the most important room for you.  If you are a homebody who likes to kick back and watch movies, your den or family room might be the room to focus on.  It might be challenging to find a home where you love every room, but you can give a little on the others if the one you use the most is perfect for you.
• Stick to your budget.  While searching for your dream home, it may be tempting to extend your budget a bit. Don’t do it. A standard goal is to keep your mortgage payment (with taxes and insurance included) at around 25% of your monthly household income.  Make sure that you have looked at your overall monthly budget to see what you can afford, and then limit your house hunting to properties in your price range.  Refrain from looking at houses 1-2 price ranges above yours. You don’t want to get excited about a property that you can’t afford. In addition, once you have seen them, the houses that you can afford won’t look as good in comparison.  The exception is that if it is a buyer’s market, you might be able to negotiate a lower price, so it is ok to look at homes just slightly above your budget.
• Decide if you want to do renovations or if you want a move-in ready home.  If you are handy, you might see a diamond in the rough that you want to fix up yourself.  Make sure if you do this that you are not shopping at the top of your price range because you will need extra funds for doing the renovation.
• Try to see through the “ugly”.  It’s easier said than done for some people, but try not to just pass on a home because of cosmetic reasons.  Look at the bones of the house and imagine its potential. Focus on layout and flow rather than paint and décor.  If it’s the right home for you, cosmetic changes are easy and will give you the opportunity to make the home your own.
• Don’t give up!  It might take a while to find exactly what you want.  Be patient and don’t settle for something just because you’re tired of looking.  You never know when just the right house will go on the market.  It will be worth the wait when you move into the home of your dreams!

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House hunting can be overwhelming sometimes, especially when beginning the search for your first home.  Chances are you might get caught up in the process and important details might slip by you. While the number of rooms, condition of the kitchen, and size of the yard are important, there are other things to consider before you make an offer.  This list of things to look for can help get your search off to the right start.

1.      Location

They say that the 3 most important things to look for when buying a home are location, location, location.  While a home might not be perfect, loving your neighborhood and neighbors can make all the difference in living with imperfection.  And face it…you can change almost anything about your house, but you can’t change its location or the people living nearby.  When you go house hunting, make sure to consider the home’s proximity to your work, the appeal of the neighborhood, where in the neighborhood the home is situated, ease of access, noise from neighbors, traffic, pets and access to parks, shopping, schools and public transportation.

2.      Home Placement

Beyond location, look at how the home is situated.  If the home is on a hill does it have a view, a walkout basement, or lots of stairs to climb? Do neighbors' windows look directly into the home? Is the yard suitable for kids, pets, gardening, or other uses? Is their safe access to the home? These are all important questions to ask yourself when determining if it is the right property for you.

3.      Check Out the Neighborhood

While it’s important for your house to meet your expectations, it’s equally important that the neighborhood meets them too. Take a drive around the development you are interested in on week days and weekends, during the day and in the evening.  Are the homes in good repair? Are yards kept clean and tidy?  Is the neighborhood safe enough for people to walk, run or bike?  Are there children playing outdoors?

4.       Consider a Home’s Curb Appeal

You want a home that is going to reflect your lifestyle. Do you live a    casual, laid-back life? Then you probably won’t want a formal Victorian or Tudor style home.  A simple, contemporary home might better suit you.  Pay close attention to exterior features.  Think about maintenance.  For example, a brick home is easier to maintain than one with siding.  Do you like working in the yard?  If not, you might not want a house with extensive landscaping.  Is the roof in good condition?  Attention to detail will help you choose the home with the best curb appeal for you.

5.       Size and Floor Plan

You may be thinking about buying your dream home. But is your dream home practical?  Do you need 4 bedrooms and 4 baths when you live alone? A spacious home may provide the extra room you've always wanted for a home office or a theater room, but you'll pay higher heating bills and have higher taxes. Additionally, it will take more furniture to furnish and money to decorate. Think about how the new home space will be used and whether it will fit your lifestyle now and in the future.

6.        Bedrooms and Bathrooms

Decide how many bedrooms and bathrooms you will need and only    look at homes that meet that criteria.  You don’t want to fall in love with what is otherwise a perfect house if it doesn’t provide the space needed for your family.  It’s smart to consider counting an extra bedroom in that number so that you have extra space for a home office or guest room. If you think you might add on to the home later, make sure you consult an architect who can advise you on space planning and regulations.

7.         The Kitchen

For many people, the kitchen is the heart of the home. Don’t settle for a home with a kitchen that doesn’t work for you.  Yes, you can remodel later, but at great expense.  If it’s an easy fix like replacing cabinets or countertops, get a price quote before committing to the house so that you will know if it is within your budget to take that on.

8.          Closets and Storage

Older homes often have small closets and lack storage space.  As you’re looking at a home ask yourself where you will store your belongings.  Tiny closets don’t have to be a deal breaker.  There are ways to maximize storage without renovations. Newer homes tend to have lots of storage and you may sacrifice living space while having more closet space than you need.

9.          Windows and Lighting

While looking at a home keep in mind your preferences regarding light and privacy.  Do you want a lot of windows to provider bright, sunny rooms?  Pay attention to the locations of electrical outlets and fixtures to make sure they will meet your lighting needs.

10.            Finishing Touches

Even a simple home can look spectacular with the right moldings, hardware, and a fireplace.  If elements like these are important to you, look for them while house hunting. 

You may not find everything you want in one house, but keep this list handy and you are more likely to find the home that best suits your needs and desires.  Happy House Hunting!

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The idea of purchasing your first home is exciting, but can also feel overwhelming.  Before starting your home search, you need to figure out how much you can afford.  If you’ve been hesitant to move forward because you’re afraid you won’t have enough cash for a down payment or that you won’t qualify for a loan, you shouldn’t despair.  There are programs available that can help you!  So, stop padding your landlord’s pockets and take advantage of programs that will assist you in making a sound financial investment in a home of your own.

The Alabama Housing Finance Authority has two programs designed to assist people with purchasing homes:

1.Step Up - Step Up is a homeownership program designed specifically for moderate-income home buyers who can afford a mortgage, but need help with the down payment.  With this program, the money for the down payment is secured by a 10-year second mortgage and is combined with a 30-year, fixed-rate first mortgage.  Since the loans are serviced by ServiSolutions, a division of AHFA, homeowners have only one check to write each month.  Program participants must complete a homebuyer education course to qualify…a small price to pay to become a homeowner!  People who earn less than $97,300 are eligible for the Step Up program, regardless of household size or location.

Step Up+ is a new, temporary program that was just announced by the AHFA in June, 2017.  This mortgage enhancement will pay the upfront split private mortgage insurance premium (up to $1,500) for homebuyers who earn less than 80% of the area median income.  This way, homebuyers will pay a lower monthly premium as part of their mortgage payment. Information and qualifications:

• HFA Preferred conventional loans only
• 3% down payment assistance available through Step Up
• For new or existing homes in Alabama
• Homebuyers must have a credit score of 620 or higher
• Must complete homeownership education course
• Must apply for loan through a participating lender
• Private mortgage insurance will be underwritten by Genworth or ARCH (no delegated options)

All Step Up+ loans must close by September 30, 2017.

The Step Up program’s standard $97,300 household income limits will NOT apply for Step Up+.

For more information, contact a participating lender.

2.Mortgage Credit Certificates - The Mortgage Credit Certificate (MCC) program gives homebuyers another savings option.  MCCs are available with conventional fixed-rate, FHA, VA, Rural Development and privately insured mortgages.  Applications are accepted on a first-come, first-served basis by a statewide network of participating lenders.  Participants must meet federally established income and sales price limits.

MCCs provide a tax credit to reduce the amount of federal taxes owed by a percentage               of the annual mortgage interest paid each year.  The remaining annual interest may be claimed as a mortgage interest deduction on the homebuyer’s federal tax return.

Qualified homebuyers pay lower federal income taxes or benefit from immediate savings by updating the withholdings on their W-4 form.  MCCs may be paired with AHFA’s Step Up program or any other 30-year, fixed rate, amortizing mortgage offered by a participating lender.

Mortgage credit rates are based on the loan amount:

• 20% MCC for loans of $150,001 or greater; no cap
• 30% MCC for loans of $100,001 to $150,000; $2,000 per year cap
• 50% MCC for loans of $100,000 or less; $2,000 per year cap

The real estate professionals at Homes for Sale in Montgomery Alabama can explain these programs to you and answer any questions that you have.  Contact them and start your home search today!

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1.  The first and most important thing you need to do before looking for a home to buy is to find an agent.  The reason this part is the most important is because buying a home is a huge financial obligation and you want to choose the right person to help you with such a big decision in your life.  A good way to find an excellent Realtor is to talk with your friends and family members that you trust to see whom they have used in the past.  Once they give you a few suggestions, you can meet each one and see which one best matches your personality wishes.  You will be spending quite a bit of time with this person so you want to make sure that you get along beautifully with them.   
    

2. The next step in home buying made easy  is to find a lender.  Many times you can find out from your Realtor about what lenders they tend to use or who they think can be the best match for you and your particular situation.  If your Realtor doesn’t lead you to the best match, again you can talk to your friends and family for suggestions.   
    

3. You then need to make sure your credit is as clean as it can possibly be.  Lenders can many times give you a bit of guidance in this area so that you can get approved for a loan.   
    

4. It is important that you get pre approved for a loan before you go out searching for the home of your dreams.  The lender that you choose will help you to know exactly how much of a house you can comfortably afford before you get your heart set on one.  
    

5. Lastly, figure out exactly what you are looking for in a house.  Make a list of your wants and desires in order of their importance.  This will help to guide you in your home buying  adventure and will help avoid wasting precious time.