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Pre-Qualification, Pre-Approval & Conditional Approval: What’s the Difference?

Wednesday, July 13, 2022
by The Hat Team

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When you are considering the purchase of a new home, one of the first things to think about is if you will be able to get a mortgage loan. At the start of the home buying process, you will hear terms like “pre-qualification”, “pre-approval”, and “conditional approval”.  If you are not familiar with these terms and their meanings, it can add to the already stressful process of entering the housing market as a buyer.

While all these terms may sound similar, they are not the same. Pre-qualification, pre-approval, and the conditional approval letter share common characteristics, but they occur at different times during your journey to home ownership. Having a clear understanding of what they mean will save some of the confusion, time and energy that goes into finding the right home for your budget and your family.

Let’s take a look at each of these terms:

PRE-QUALIFICATION

Getting pre-qualified for a mortgage loan is the earliest step of the three terms we are looking at. A pre-qualification will give you an estimate of how much you may possibly be able to borrow from a lender. Basically, you will provide information such as your financial history and credit report to your lender. You can do this verbally at this stage as it is not an overly comprehensive process. Your lender will use the information provided and will give you an estimate of the amount you may qualify for. This will allow you to explore the mortgage options available to you.

After your lender has determined the amount you pre-qualify for, you will receive a pre-qualification letter. By sharing this letter with your Realtor, they can use it when making an offer to a seller to give evidence of your commitment to and preparation for buying a home.

Remember, a pre-qualification is not a guarantee for a loan. While it is a great way to determine what types of loans are available to you, it does not mean a loan for the amount of the home you hope to purchase is a sure thing.

PRE-APPROVAL

Getting a pre-approval is a more formal process that requires an in-depth investigation of your finances. This process will take place after you have submitted your mortgage application and documentation will be required.

Your lender will need the following:

  • Employment verification (W-2s or 1099s)
  • Bank statements
  • Retirement and brokerage account statements
  • Any other assets
  • Current real estate debt or rental statements
  • Monthly debt payments (student loans, auto loans)
  • Court orders (divorce, child support, alimony, etc.)
  • Tax returns

It may feel overwhelming to provide so much personal, financial information, but it is necessary to obtain a pre-approval for a mortgage loan. Like pre-qualification, you will get a pre-approval letter if your application is accepted by your lender. This letter provides the sellers with the information they need to know that you can afford the mortgage payment and you are ready to purchase a home.

When competing for a home with other buyers, a pre-approval letter can be a game changer, making you look like a serious buyer over others who may not have a pre-approval letter yet.

CONDITIONAL APPROVAL

Conditional approval is also known as “up-front underwriting”.  If you choose this option, your lender will review your finances thoroughly in order to provide you with an exact loan approval amount for the specific home on which you are submitting an offer.

What makes a conditional approval letter different from a pre-approval is in the name itself; there will be a few conditions that must be met before closing. For example, purchase agreements, title verifications, home appraisal, and inspections must all be complete and in order. The closing process cannot begin until all the conditions listed in the letter have been met.

Pre-qualification, pre-approval, and the conditional approval letter all provide validation to both your lender and the seller that you are a serious buyer that can afford the home.

They each serve the same purpose, but you will encounter them in different circumstances within the home buying process. Understanding the nuances and differences now will make you a better-informed buyer and will make the home buying process less stressful for you!

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.

Photo credits: PYMNTS.com, Investopedia.com, debt.com, texaslending.com

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Purchasing a Home is an Excellent Investment

Wednesday, July 6, 2022
by The Hat Team

Investing in real estate is a time-tested way to successfully build wealth.  

While there are many ways to invest your savings, investing in real estate is unique in that it offers cash-flow, liquidity, profitability, and tax and diversification benefits those other investments do not.  If you’ve been thinking about how to build wealth for your retirement, you would be smart to consider investing in real estate.


There are four primary ways to make money in real estate:

  1. Appreciation. When a property increases in value, you have real estate appreciation. Sometimes is happens due to changes in the market and other times it may be due to upgrades made on the property.
     
  2. Cash flow income (rent). Cash flow income is a nice perk of real estate investment that you do not have in other types of investments.  It is generated when you purchase a home or apartment building or an office building and rent them out.
     
  3. Real Estate Income.  This is income earned by people who earn commissions through real estate transactions or buy property managers who oversee the operations of rental properties.
     
  4. Ancillary Real Estate Income. This can be a huge source of profit.  Things like application fees, vending machines and laundry facilities are money makers that go beyond the monthly rent. 


While there are certainly risks that come with investing in real estate, there are a lot of benefits that outweigh the risks:

  • Real estate is something that most people grow up being aware of. You may not have been exposed to things like stocks and bonds, but you likely know the importance of owning a home. Buying a home is an investment that is reachable.
     
  • Having an investment that you can see; something that is tangible, is psychologically important.
     
  • You have the control in a real estate investment.  You do not have to worry as much about being defrauded the way you might when entrusting your money to someone else to invest for you.
     
  • You will reap the benefits of tax advantages.
  • You can use money you make on a home sale to buy more real estate and increase your net worth.

Whether you are thinking of purchasing a home for yourself and investing in your own future by building equity or you are considering buying property to rent out, investing in real estate is great way to build wealth!

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 http://www.homesforsaleinmontgomeryalabama.com for more information.

Photo credits: thesavvycouple.com, portugalresident.com, pharmeceuticalonline.com, tmcfinancing.com

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1183 S Mcdonough St: Bungalow in the Heart of the Historic Garden District!

Thursday, June 30, 2022
by The Hat Team

1183 S Mcdonough Street, Montgomery, AL 36104

MLS# 519753

2 Bedrooms / 1 Bathroom / 1,408 square feet / Garden District 

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Absolutely adorable bungalow perched on a heavily landscaped knoll in the heart of the historic Garden District! This Midtown Montgomery one will steal your heart from the moment you pull up. Lush landscaping envelops the front and provides soothing privacy for the quaint front porch. Inside boasts a living room with fireplace and good-sized dining room. Breakfast room has beautiful lighted built-in china case and is open to the updated kitchen. Laundry room provides additional pantry space. Two spacious bedrooms share a hall bath, and there is a 3rd room on the back which could serve as a 3rd bedroom, den, office, study, nursery, or playroom. Antique French door and sidelights allow access to the rear deck and natural back yard. Other benefits include gorgeous hardwood floors, custom plantation shutters, like new roof, and fresh paint inside and out! Convenient to downtown and Cloverdale area.

Marketed by Montgomery AL Realtor, Billy Young, Sandra Nickel Hat Team

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892 Running Brook Dr: Move-in Ready in Established Neighborhood!

Wednesday, June 29, 2022
by The Hat Team

892 Running Brook Drive, Prattville, AL 36066

MLS# 519816

3 Bedrooms / 2 Bathrooms / 1,594 Square Feet / Silver Hills 

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This open floor plan home has been freshly painted and is move-in ready! Great room with vaulted ceiling and fireplace opens to kitchen/ breakfast room. Breakfast room features window bench, kitchen has like-new refrigerator, breakfast bar, and built-in microwave. Split plan has two guest bedrooms and hall bath on one side, and spacious main bedroom on opposite side of home. Main bedroom offers trey ceiling and French doors out to a private deck with new fan/lighting. Main bath has split vanities, garden tub with separate shower, and nice sized walk-in closet. Tiered deck in back offers great views of the large open fenced back yard. 2 car attached garage has plenty of space for storage, and there is a detached storage building in the backyard. Established neighborhood and convenient to shopping and dining.

Marketed by Montgomery AL Realtor, Bill Young, Sandra Nickel Hat Team!

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850 Augusta Ave: Adorable Cottage in Cloverdale South!

Monday, June 27, 2022
by The Hat Team

850 Augusta Avenue, Montgomery, AL  36111

MLS# 519627

2 bedrooms | 1 bath | 1,001 square feet | Cloverdale South

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Snap this up before it's gone! Adorable, updated cottage in Cloverdale South is precious inside and out. Living room opens to dining area and large open kitchen. Two spacious bedrooms share a beautifully updated bath. Home sits on a large lot with a big, fenced back yard perfect for pets. Detached building out back provides additional storage and would make a great workshop. New HVAC installed in 2020. Updated plumbing and electrical. Property has rented for $850/month and would make a great investment property or a perfect starter home for first-time homebuyer. Move-in ready in Midtown Montgomery!

Marketed by Montgomery AL Realtor, Billy Young Sandra Nickel Hat Team!

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448 Clanton Ave: Pristine Craftsman Bungalow in Historic Garden District!

Wednesday, June 22, 2022
by The Hat Team

448 Clanton Avenue, Montgomery, AL  36104

MLS# 515099

2 Bedrooms / 1 Bathroom / 2,108 SqFt / Garden District 

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Remarkable and pristine Craftsman bungalow located in historic Garden District! Calling all Craftsman-style lovers...here is your opportunity to own one of the few un-mucked and original homes in any of Montgomery's historic districts. Starting with the extra deep covered front porch that extends the entire width of the house giving comfortable and spacious outdoor living opportunities. Large front rooms including living, dining and den/study all have the original stained moldings and woodwork, as well as beautiful, coffered ceilings. Beautifully grained oak floors have been freshly refinished. Grand fireplaces/mantles, built-in lead glass China cabinets, massive pocket doors, and unique 3/4 wall with grand French doors separating the living room and den/study are among the other architectural features you will find in this well-loved home. Long central hallway gives access to two large bedrooms and updated bath (which retains original OVAL pedestal sink and craftsman built-in toiletry cabinet!) Current owner removed a wall between original kitchen and service porch to create a large open kitchen/keeping room with center island and loads of natural light. Walk in pantry allows for endless storage, and the original butler's pantry has more built-in China/glassware display cabinets. Manageable private back yard boasts large patio for outdoor enjoyment. Make this Midtown Montgomery beauty your new home sweet home!

Marketed by Montgomery AL Realtor, Billy Young, Sandra Nickel Hat Team

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Just Moved In? Make Yourself at Home!

Wednesday, June 22, 2022
by The Hat Team


Congratulations! You’ve just moved into your new house! It’s exciting, but it’s also a huge transition. It takes time to make a new house feel like home. Here are some tips to help you get started:

  • BE ACTIVE

If you have moved to a new area where you do not know anyone, you may be tempted to isolate yourself. After all, you have unpacking to do and maybe a new job to start. But try to resist that temptation. Staying socially, physically, and communally active, triggers significant feelings that create the sense of home. Join a gym or exercise class, join a community such as a church, the school PTA or a book club, and shop locally to get to know your surroundings.

  • SURROUND YOURSELF WITH LIVING THINGS

A move can be difficult, especially if you are grieving the place you left. It’s not uncommon for people to become depressed after moving to a new home. Combat those feelings by cultivating relationships with living things. Start a garden, spend time with your children and pets or volunteer in the community. Step out of your comfort zone…you will be glad you did!

  • COMFORT YOURSELF WITH COLORS

Decorate with a palette of colors that lift your mood. Choose colors that promote calm, happy feelings. For example, earth tones create a welcoming, comfortable atmosphere that evokes feelings stability, reassurance, and ease, while light pastel colors stimulate feelings of peacefulness, calm and cleanliness.

  • SURROUND YOURSELF WITH THE FAMILIAR

Even before you are completely settled into your home, placing familiar items such as family pictures and heirlooms in your new space can make it feel more like you. Even if you don’t hang your art right away, take it out of boxes and lean it against walls so that you can still enjoy it until you find time to place it where you want it. Some other ways to make you feel at home: cook favorite meals, burn candles with favorite scents and/or play your favorite music.

  • UNPACK

This may seem obvious, but it’s not unusual for people to still have boxes cluttering the house months after moving in. Take your belongings out of the boxes right away and begin decorating and arranging furniture. Start with your closets and dressers so that you will be able to find the things you need easily in order to set up the rest of your house. The sooner you do this, the sooner this once strange place will feel like home!

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.

Photo credits: antiquefarmhouse.com, verywellfamily.com, globalsportsmatters.com, angi.com, pinterest.com, dailyrepublic.com

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4261 Shamrock Ln: Four Bedroom Ranch Oozing with Potential!

Monday, June 20, 2022
by The Hat Team

4261 Shamrock Lane, Montgomery, AL  36106 

MLS# 519269

4 Bedrooms / 2 Bathrooms / 1,928 SqFt / Green Acres 

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Green Acres is the place to be! This spacious 4 bedroom, 2 bathroom brick Midtown Montgomery house is oozing with potential! Split floor plan, 2 car attached garage and nice sized shed for extra storage. Close to Vaughn Road Park. Perfect for investor looking to add to their portfolio, or a lucrative fix-and-flip! With a little TLC this could be a wonderful home!

Marketed by Montgomery AL Realtor, Alison Bertschy, Sandra Nickel Hat Team!

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Prepare for a Quick Move if Your House Sells Fast

Wednesday, June 1, 2022
by The Hat Team


With the way houses are selling so quickly these days, chances are you might need to move out sooner than you thought. And let’s face it, no matter how prepared you think you are, moving is stressful. One of the worst parts of moving is packing up your current house. You are probably busy enough already, and now you are adding this huge task to your “to do” list. It can be overwhelming. One way to make it a little easier is to spread it out over several weeks instead of trying to do it all right before you move. It is a good idea to prepare for your move even before you put your house on the market.

Here is a guideline for packing for a move:

  • PRE-PACKING - If you are planning to put your home on the market soon, it’s a good time to pre-pack items that you won’t need or use before you move. Out of season clothing, tools and small appliances, and collectibles/knick-knacks are items that you won’t miss, and you can get them out of the way.
  • BOX UP NON-ESSENTIALS - Among the items that you didn’t pre-pack, choose those that you know you likely won’t need before moving. Books, extra linens, and kitchen items can be packed up because you likely won’t be doing much reading, and you only need enough linens, plates, and utensils for the number of people living in the home. 
     
  • TIME TO GET SERIOUS - Once your house is on the market, it is time to really start paring down the amount of “stuff” still in your home. If you have children, allow them to choose a few toys/games to keep out, and pack up the rest. If you have a home office, clean it out and box up what you plan to take with you. Jewelry and shoes that you don’t wear daily can go as well. Simply label everything well so you can find items you might want or need if your house doesn’t sell as quickly as you thought it would.
     
  • IF OFFERS ARE COMING IN - Now it is time to pack up all but the few things you will need to get through the last few weeks at your current home. The rest of your clothes and kitchen items can go (leaving yourself what you will need until the move, of course).  Go through your medicine cabinet and toss any expired medications. Pack the rest except for the ones you take daily. If you accept an offer and the financing goes through quickly, you may be closing and moving soon!
     
  • MOVING IS IMMINENT - At this point the stress might reach maximum levels, but if you have been packing a bit each week, you should be almost finished! Box up your electronics (in their original packaging when possible), bathroom items, and any miscellaneous items that are left. Keep a box for essential items that you will keep with you as you are moving.
  • MOVING DAY: IT’S HERE! - All that should be left is furniture and appliances.  Whether you have hired movers to load the large items or you are doing it yourself, it will be so much more manageable with everything else already boxed up and ready to go.

IMPORTANT TIP: Label every box.  You can either write what is in the box or what room the box should go to. Or both. You will be glad you did when you are unpacking!


Remember that this is simply a general guideline.  You should do what is right for you and your family when it comes to packing and moving. But hopefully this will make what can be a trying and overwhelming time a little more pleasant.

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.

Photo credits: azbigmedia.com, moving.com, foxnews.com, movematcher.com

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4524 Young Orchard Ct: Large Young Pointe Home in Gated Neighborhood!

Monday, May 23, 2022
by The Hat Team

4524 Young Orchard Court, Montgomery, AL  36106

MLS# 516795

3 Bedrooms / 2.5 Bathrooms / 1,773 SqFt / Young Pointe

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Quiet gated neighborhood with great convenient location! Situated on a large corner lot, this is one of the larger homes in Young Pointe. Spacious living room/dining room combination has soaring 20 ft ceilings and has a contemporary feel. Cozy den/family room with fireplace overlooks covered patio and private back yard and is open to the big family sized kitchen. Laundry room and powder room finish off the main floor. The second floor features main bedroom with private bath and walk in closet, two guest bedrooms and a hall bath. Attic provides additional storage space, and the 2-car garage has lots of shelving for storage. This Midtown Montgomery hidden gem is move-in ready and is very convenient to shopping, dining, and centrally located within the city!

Marketed by Montgomery AL Realtor, Billy Young, Sandra Nickel Hat Team!

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