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Mortgage Tips for First-Time Homebuyers

by The Hat Team

Deciding to buy a home is exciting. But it can also be overwhelming, especially for first-time home-buyers.  There is so much to think about. Before you start your home search, you should find a mortgage lender who can help walk you through the home-buying process.  Follow these mortgage tips and you will be prepared to purchase the home of your dreams!


With a little homework, you will be able to find the best lender to help walk you through the home-buying process.  Ask us, we know the good guys and gals. Interview lenders. Find out what their closing time averages are and look up customer satisfaction rates.  This is likely the largest financial investment you will ever make, so be sure that the lender you choose is right for you both personally and financially.


There is a difference between what you can afford and what you are willing to spend.  Many factors play into this decision.  Your lifestyle, the size of home you’re looking for, and other expenses should all be considered.  You might be shocked by what the numbers say. Chances are you won’t want to spend as much as you qualify for.  So, work out a budget first and don’t overestimate what you can afford.


The last thing you want to happen is to find the perfect home and not be able to make an offer because you haven’t been pre-approved for a loan.  Taking the time to do this now will save you time and grief in the future.


Now is not the time to make large purchases.  Avoid taking out new lines of credit.  Don’t purchase a new car or apply for a new credit card.  Make sure that you are not adding to your credit card balances.  Remember that your debt to income ratio is a vital piece of the mortgage puzzle and can be a deal breaker if you go over your limit.  Save large purchases for after closing day.

  1. DON’T RUSH!

Now that you’ve got all your ducks in a row, the fun begins.  Take your time searching for the right home.  This is a financial investment that you will be living with for a long time, so don’t settle.  Sandra Nickel and The Hat Team Realtors can answer any questions you have about purchasing your first home.  Give us a call today at (334) 834-1500.

Ins And Outs Of Mortgages

by The Hat Team

If you are a potential purchaser of Montgomery AL real estate, you need to be familiar with the various types of mortgages available to you and the terminology that accompanies them.  So many choices may be a boon to borrowers, but that very variety holds the potential for much confusion.  Here is a simplified guide to terms and types.


  • Fixed rate:  The interest rates do not change during the life of the mortgage, thus allowing you to know the amount of your payment at all times.
  • Adjustable rate (ARM):  The interest rate is tied to a certain index and margin and can fluctuate up or down, thus affecting the amount of your payment.
  • Step:  The interest rate and monthly mortgage payment for your Montgomery AL real estate remain the same for a specified period of time, but after that the interest changes to the prevailing rate and stays there
  • Balloon:  A loan payment that expands after a specified period of time.  Similar to a fixed rate loan in the early years but with a steep payment of all money owed at the end.


  • Fixed rate mortgage:  Traditionally for 25 or 30 years, but also available for 15 or 20.  Although interest rates are somewhat higher than for other types of loans, that rate remains in place for the duration.  Especially good if you plan to live in your home for at least ten years.
  • 1 Year ARM:  Also has a 30 year duration, but the interest rate is adjusted each year.  It is important for you to know how often the rate can be changed and if there are annual and life-of-loan caps on the rate.  Beware of payment caps, which can result in negative amortization.
  • Hybrid mortgage:  Sometimes called a three-year fixed or five-year fixed, this type of mortgage incorporates some of the features of both a fixed rated and an ARM, meaning that the interest rate on your Montgomery AL real estate will remain the same for the first three (or 5) years but will then convert to a one-year ARM for the remainder of the loan term.
  • Balloon mortgage:  In this type of arrangement, you pay a low rate of interest for a certain amount of time.  At that point, the entire amount owed is due, requiring you to refinance your property or make a final—and extremely large—payment to the lender.
  • Interest-only loans:  As the name suggests, you pay nothing on the principal for the first five years.  After that you are expected to make regular monthly payments which include both interest and principal.
  • FHA loans:  FHA mortgage loans are insured by the government through insurance that is funded into your loan. FHA allows down payments of as little as 3%. 
  • VA loans:  Available to veterans who have served in the US military forces.  The main benefit to this type of loan is that you do not need a down payment.  The loan is guaranteed by The Department of Veteran Affairs.

Being familiar with mortgage terms and types should make it easier for you to talk with your Realtor and/or lender about which option is most beneficial for you.

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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

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

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