Real Estate Information Archive


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Buying is Better than Renting: Here’s Why

by The Hat Team

With interest rates still relatively low, buying a house right now is less expensive than renting in many places, including Montgomery, AL.  Now is a great time to lock into a rate.

Buying is often considered to be financially better than renting over the long run because your mortgage payments build equity in your home, which you will eventually own, while rent only goes toward the upkeep of your home and the pocket of your landlord. That is just one reason buying is better than renting.  Here are some others:

  • You can do what you want with your property. Making home improvements will be your choice…from colors to paint the walls to light fixtures to types of floors, you won’t need permission from a landlord to make changes.
  • Tax benefits. Tax Deductions are a great perk of home ownership.
  • Stable monthly payments. Rents can go up, but with a fixed-rate mortgage, your monthly payments won’t change.
  • Forced savings.  Renting might seem less expensive, but would you actually save the money you don’t spend on rent?  Since your mortgage payments are building equity in your own home, which you can later sell for profit, it’s like a forced savings.

Using a Rent vs But Calculator you can see how buying is a better financial option right here in Montgomery.  For example, after 4 years, the cost of homeownership (down payment, mortgage, taxes, etc.) for a $150,000 home in Montgomery would be $94,094.  The total cost to rent the same house for that period would be $52,193.  Renting would leave you with $41,901 in your pocket (including the money you didn’t spend on a down payment).  So, it looks like renting would be better financially, right?  But wait…not so fast.  Let’s look at what you gain over the same 4-year period if you buy.  After 4 years, your home will have $70,371 in equity. However, if you instead rent and invest your down payment and the other money you save at a 6% return rate, it will earn around $8,351 in 4 years.  So, if you look at your gross costs, equity and investment potential, it’s better for you to buy than rent if you plan to live in your home more than 3 years and 3 months.

The bottom line is, if you’ve been thinking about buying a home in the Montgomery area, don’t wait!  Start investing your money in your own home vs that of a landlord today!

Contact Sandra Nickel and her Hat Team of professional Realtors at 334-834-1500 and let them help you find your dream house today!

Pay More or Less

by The Hat Team

Paying more for your house payment does not make your home more valuable. It does mean that the mortgage rate may be higher than it has to be.

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Even though fixed rates may never again be as low as they are currently, an adjustable rate mortgage may provide the lowest cost of ownership depending on how long a borrower plans to own a home. There are different types of ARMs but the one in this example is a 30 year mortgage with the rate fixed for five years and can adjust every one year after that based on independent indexes.

Another feature of a FHA ARM is the maximum rate change in one period is 1% and the maximum lifetime cap is 5% over the initial rate.

In the example below, the payment on the adjustable is $153.48 lower for the first five years or 60 payments. Another interesting thing is that lower interest rate loans amortize faster than higher interest rate loans. In this example, the ARM has a lower unpaid balance at the end of the first five years by $4,239.

The total savings on the ARM at the end of the first period is $13,477. If a borrower felt confident they would sell the home prior to the breakeven point of 8.5 years, the ARM would produce a lower cost of housing even if the mortgage rate escalated the maximum at each adjustment period.

To help determine whether you pay more or less, consult with a trusted mortgage professional and your real estate agent to learn the advantages and disadvantages of different programs. To try your own comparison, check today’s rates at the Freddie Mac Mortgage Rate Survey and plug your numbers into an Equity Accelerator.

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Information courtesy of Montgomery Realtors Sandra Nickel Hat Team.

Why Borrowers Pay Different Rates

by The Hat Team

interest ratesLenders, like any business, have to make a profit.  The cost of acquiring the funds, the operating costs to service and the expected profit margin are easily identified.  The variable in pricing is the type of mortgage and the credit worthiness of the borrower. 

A loan with a 3.5% down payment is riskier than a loan with 20% down payment.  If the lender has to take the property back to recover their expense, the margin is greater between what is owed and what the property is worth on an 80% mortgage. 

Credit scoring is a risk-based pricing method that allows a lender to be competitive in the market for the best loans from different borrower groups.  Individual lenders set their own levels for what they consider “A” credit which is reserved for the best rates.  If good credit is approximately 710 to 740, scores below that are considered higher risk and will have higher rates.

Risk must be assessed for both the borrower and the property that collateralizes the loan.  The borrower’s credit history and income stability are strongly evaluated by the lender but if a default should occur, the property must secure the loan to avoid a loss to the lender. 

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The challenge for some buyers is they are unaware of what their credit score is and how it will affect the interest rate offered by the lender.  It is to the buyer’s advantage to be pre-approved by a reputable lender prior to starting the process of looking for a home.  In some cases, the lender can actually improve the borrower’s credit score to help them qualify for a lower interest rate.

Contact me for a recommendation of a trusted mortgage professional - [email protected]

Search all Montgomery AL Real Estate And Homes For Sale.

Sandra Nickel and the Hat Team have distinguished themselves as leaders in the Montgomery AL real estate market. Sandra assists buyers looking for Montgomery real estate for sale and aggressively markets Montgomery AL homes for sale. Sandra is also an expert in helping families avoid foreclosure through short sales and is committed to helping families in financial hardship find options. For more information you can visit

Interested in buying a bank-owned home? Get bank-owned listings alerts FREE!

You can reach Sandra by filling out the online contact form below or give her a call anytime.

Are the Increasing Interest Rates Rushing your Closing Date?

by The Hat Team

Buyer's often find themselves watching a property for a price reduction. Although getting the best deal possible when purchasing Montgomery real estate is important, it is not the only factor that determines monthly payments on a home. Rising interest rates nearly diminish the positive aspects of waiting for prices to drop. montgomery real estate

Most people are familiar with the basic trends in real estate that have been affected by the United States economic crisis. The listing prices of homes have been steadily declining over the past couple years. This has put people looking to purchase Montgomery real estate at an advantage over those trying to sell. People have best described this as a buyer's market due to the low property prices and reasonable interest rates. However, the decline in prices is stabilizing while interest rates are beginning to inch up. It is becoming more and more popular for investors to make offers on properties, sometimes sweeping the property away from home buyers. Could buyers begin loosing their advantage? Today, properties that are correctly listed at a reasonable asking price are not being reevaluated and reduced as often. These are some of the factors that prove lower Montgomery real estate prices are not always worth the wait. 

Buyer's should not be waiting for interest rates to continue declining, especially since real estate and economy experts are predicting that the lowest rates have come and gone. This is not necessarily a horrible thing. Rates are still lower than historical highs, which exceed 6.00%. With the new administration trying to bring back the economy, many analysts see a period of severe inflation in our future. Meaning interest rates are likely to jump even higher. The Federal Reserve introduced a program to help control interest rates on home loans. For example, the rates for a thirty year fixed-rate loan have been consistently ranging from 4.50% to 5.00%. Now, rates for this type of loan and the rates of other types of real estate loans are beginning to exceed their more reasonable range. Therefore, increasing interest rates may start rushing your desired closing date. 

At the end of May buyers, who have been procrastinating by waiting for lower interest rates or price reductions, learned their lesson the hard way. At the end of the month interest rates went up about .50%-1.00%. Increasing interest rates defeats the purpose of waiting for [city] real estate prices to drop. Higher interest rates decrease the overall affordability and increase the monthly payments, especially when the price of the desired home does not budge. 

Bottom line, it is not a time to be waiting around. Time is running out to take advantage of the current real estate market and loan programs being offered by the government. For instance, first time home buyers have until December 1st, 2009 to close on their home if they want to be eligible for a maximum tax rebate of $8,000 dollars. Since interest rates are expected to increase, waiting for real estate prices to drop is not worth the wait. Don't procrastinate. You might unintentionally pass up a piece of gold trying to find a diamond. 

Search all Montgomery real estate and homes for sale by visiting

Positive News For Alabama Real Estate Market

by The Hat Team

We hear so much doom and gloom these days, I wanted to share with you information from one of our most trusted lenders, John Herzog CMB, Vice President/Regional Manager:

Last week was a very good week for interest rates and this week has begun on a positive note. It would appear with lenders applying better credit standards and underwriting guidelines that we are regaining the confidence of mortgage investors from abroad as well as domestically.

I am very encouraged that we have seen the bottom of the housing slump in Alabama and in fact we are at the beginning of leading the nation back to stability in the real estate markets.

Some areas of the country will continue to decline for months to come, but for the vast majority of America, and especially Alabama, activity and new loan applications are on the increase. Stay positive and have a great week.

If you are ready to take advantage of the bottom of the real estate slump and buy a Montgomery home while prices and interest rates are low, visit or give us a call at 800-428-5239.

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Midtown Montgomery Real Estate Market Report

by The Hat Team
Buyers It's Time To Buy! reports interest rates have been inching down for the past three weeks. This is icing on the cake for Midtown Montgomery home buyers who are benefiting from a moderately slower housing market. Sellers haven't been left out in the cold, however, as prices continue to rise. Take a look at the numbers. 

The number of single family homes in Midtown Montgomery (Midtown consists of neighborhoods south of I-85 between Exits 1 and 6) that sold in February increased by 8 or 20%!  And the number of pending listings decreased by only 3 homes or less than 2%. 

What's more, February 2007 saw market times of 169 days vs. 188 days in February 2006.  So demand is increasing along with prices. And average sales prices increased $24,140 or a whopping 17%. So it appears 2007 is well on its way to being another great year for Midtown.  




Market Times

Sales Price

February 2007





February 2006





Sellers are becoming more comptetitive in their pricing to attract today's ready, willing, and able buyers. Add to this the interest rates inching down...Buyers, it is time to buy!!

If you are thinking of buying a home? You can get a daily email list of new homes for sale as they hit the market by visiting It is fast, easy and FREE! 

Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed. 

Displaying blog entries 1-6 of 6




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