Real Estate Information Archive

You may think that the only good debt is NO debt, and that is understandable. But the truth is that if you want to purchase big-ticket items like, for example, a house, you will most likely have to borrow money to do so.  A loan to purchase a home is justifiable; essential even, and provides value while taking on debt. However, there are other forms of debt that can bog you down and make it challenging to manage your money. Let’s take a look at what the differences are between good debt and bad debt.

What is good debt?

You’ve probably heard it said that “it takes money to make money”.  This is the rationale we take in determining what good debt is. If the debt assists you in generating income or building wealth, it can be considered good debt. This debt adds value to your future and benefits you in some way. Here are some examples of things that can be considered good debt:

• Education: Higher education and trade schools may offer greater earning potential. Investing in a college degree or a technical trade may pay for itself within a few years of graduation. However, keep in mind that not all degrees offer the same value, so you should do your research to have an idea of how much you can potentially earn and how long it may take you to pay off your student loans.
   
• Owning Real Estate or a Home: Owning a home can generate income either by renting it out or via resale value. There are also tax breaks that benefit home owners that are not available to renters.
   
• Owning a Business: While starting a business may require a substantial investment, that investment is still considered good debt. There are risks involved, but with hard work, being your own boss can be financially beneficial.
  
• Transportation: Depending upon where you live and work, transportation may be essential. This means possibly investing in a reliable vehicle to get you to and from work. Having a vehicle can open up opportunities for jobs that might not be available to you if you cannot provide your own transportation. But it is vital that you purchase a vehicle within your budget so that your monthly car payment is within your means.

What is Bad Debt?

If you borrow money to purchase things that depreciate in value, this is considered bad debt. In other words, items that either will not increase in value or bring meaningful value to your life are not worth going into debt for.

Here are some examples of bad debt:

• Clothing and Consumables: Clothes may be a necessity, but are often not worth what you pay for them. Food and furniture are also essential, but going out to eat every day or purchasing new furniture frequently are not good ways to live within your means. If you have to use credit to eat out or if you can’t pay off a credit purchase within a short period of time, you may build up a lot of debt which can hurt you financially.
  
• Credit Cards: Credit cards can help you build credit, but they can be dangerous if they are not used properly. If you can’t pay your credit card bill in full monthly, interest and fees will add up quickly, putting you further into debt. In fact, you may end up paying more in interest and fees than you did for the original purchase. It is in your best interest to save credit card use for necessary large purchases or for emergencies.
   
• Transportation: As seen above in the good debt category, having a reliable vehicle may not only be necessary, but can also provide value. However, having a second vehicle or vehicular “toy” of some kind (think boats, four-wheelers) may do a number on your budget. You need to be sure that you can afford another payment before adding something else to your monthly bills. And remember that “needs” should always come before “wants” when determining your budget.

Focus on Good Debt

If you manage your good debt, and have a clear understanding of what construes bad debt you are less likely to get in long term financial trouble.  But remember…even if you don’t have bad debt it is still beneficial to pay off good debt as quickly as possible!  Doing so will help you if /when you are applying for a mortgage or other loans in the future.

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

Photo Credits: revenuesandprofits.com, money.com, autoversed.com, usatoday.com, debt.com

Are your kitchen cabinets looking a little shabby (not shabby chic, worn out shabby)? Whether you are getting ready to sell your home or you simply want to improve it for your own enjoyment, refacing old, ugly kitchen cabinets is a good place to start.

Refacing cabinets is the process of covering the exposed frames with a thin veneer of plastic laminate or real wood. Then you can add new doors/drawer fronts to match or complement the new veneer. Complete the process by adding new hinges, handles, and molding.

There are some pros and cons to refacing:

Pros:

• Costs significantly less than replacing cabinets
• Requires less time than replacing
• You do not have the added hassle of having to tear out old cabinets
• Kitchen is still useable while refacing
• It is a “green” option because you will not be adding old cabinets to a landfill

Cons:

• You cannot fix a bad kitchen design with refacing
• There are a lot of expensive options for veneers and hardware to tempt you and you may end up spending almost as much as you would replacing cabinets

As you can see, the pros outweigh the cons!

So, what are your options for refacing? The choices are nearly limitless! You can find veneers in a wide variety of colors, patterns, grains, textures, etc.  You can mix and match them to come up with a unique look to match your vision. Thermofoil doors are durable and an affordable alternative to wood or laminate doors. Plastic laminates are also very durable and offer tons of options for colors and patterns. They are reasonably priced as well. Real wood is going to be more expensive and will need to be carefully sealed to protect against moisture but offer quality and beauty with woods such as oak, cherry, and maple and a wonderful array of stain colors.

It is important to know that refacing is feasible only if your existing cabinet boxes are in good shape structurally. If your cabinets have water damage, warping, or broken frames, they are not a good candidate for refacing. Understanding Cabinet Refacing

Whether you decide to do it yourself or hire someone to reface your cabinets, it is a relatively affordable way to give your kitchen a whole new look!

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

Photo Credits: painterati.com, hometips.com, my.lwv.org, kitchenmagic.com

Montgomery AL Home For Sale: 

1938 McKinley Ave, Montgomery AL 36107

MLS# 503985 | 2 Bedrooms | 1 Bath | 1,045 Square Feet | Capitol Heights

Virtual Tour

Calling all first time homebuyers or Investors! This adorable Historic Capitol Heights cottage has been well maintained and is move-in ready! Features include beautiful hard wood floors, a separate dining room, an enclosed porch which makes a great office or cozy den, and a large laundry/utility room! It is situated on a large corner lot with a nice fully fenced flat yard, cute patio and storage building.

Marketed by Montgomery AL Realtor Lauren Keen, Sandra Nickel Hat Team!

Montgomery AL Real Estate For Sale

3603 Thomas Ave, Montgomery AL 36111

MLA# 503961 | 4 Bedrooms | 4.5 Baths | 2,992 Square Feet | Edgewood

Virtual Tour

Here is your opportunity to own a pristine Mid-Century modern home in desirable Edgewood! This unique property has been very well cared for by the same owner since the early 80's! Situated on a large corner lot, this home has a great flow and features vaulted ceilings, a large open living area with an entire wall of built-in bookcases, a huge corner fireplace, and lots of windows with natural light. The three bedrooms are on the main floor, each with their own bath and an upstairs bedroom/studio with a full bath, perfect for a teenager to have their own space. The room off the living room is ideal for an office/playroom or a 5th bedroom. Off the kitchen is a breezeway to the double carport, storage and greenhouse. The back yard has plenty of room for play and pets even with the enormous pool where you can't help but picture your family and friends enjoying!

Marketed by Montgomery AL Realtor Lauren Keen, Sandra Nickel Hat Team.

Your home equity is how much of your home that you “own”. For example, if you put down 20% on your home when you purchased it, that means you already have 20% of the home’s value of equity in the home.  As you pay the loan down over the years, your principal loan value decreases while your equity increases. To calculate your equity, take the current appraised value of your home and then subtract what you still owe on your home. Home Equity Calculator

Every month when you make your mortgage payment, you gain equity in your home.  If you make full payments on time, your equity will grow as your principal loan decreases and at the end of the term of your loan, you will own your home outright. So, if you have a 30-year mortgage, you will own your house in 30 years. Building equity is one of the major perks of being a homeowner.  It makes your home a valuable asset that you can use in the future to either buy a new home or make other large purchases.  Some people even use their home equity to fund their retirement. But thirty years is a long time! If you want or need access to your money sooner, you can build your equity faster and here is how:

• PAY MORE AGAINST YOUR PRINCIPAL MORTGAGE

By making extra mortgage payments, or paying more than you owe each month, you can decrease the amount of your principal balance and build equity faster. For example, if you make one extra mortgage payment a year, you could possibly pay off your loan ahead of schedule. Or, if you pay a little more than your required payment each month, you can also shorten the life of your loan. Say your required monthly payment is $2100. $2100 divided by 12 is $175. If you add $175 to each monthly mortgage payment, after 12 months you will have made one extra payment for the year, thus paying off your mortgage a little quicker! But be careful, because some loans have prepayment penalties for paying off your loan too much ahead of schedule. So, check into that before you decide to pay more on your loan. Prepayment Penalty

• WHEN YOU GET EXTRA MONEY PUT IT TOWARD YOUR LOAN

Extra money? Who has that? Well, you might if you get a bonus or a gift of money. Perhaps you can’t afford to put extra money toward your loan every month, but things like holiday bonuses or even a tax refund or an inheritance may give you the extra cash you need to make and extra loan payment. Just be sure that your money is going toward your principal and not your interest. How Do I Make Extra Payments on My Loans

• COMPLETE A HOME IMPROVEMENT PROJECT

There are some home improvement projects that can add significant value to your home, thus increasing the equity you have in your home. Even a small project can give you a huge return on your investment (ROI)

• CHOOSE A 15-YEAR LOAN VERSUS A 30-YEAR LOAN

Just because a 15-year mortgage is half the time of a 30-year mortgage, that does not mean that your monthly payment will double. Have the mortgage lender run the numbers to see if you can swing the payments on a 15-year loan. If so, you will not only pay the loan off faster, but you will also pay less interest over the life of the loan, thus saving even more money!

• MAKE A LARGE DOWN PAYMENT

While it may be tempting to take advantage of a loan that offers a low or no down payment, if you’re looking to build equity quicker, it is not the best choice. A large down payment will assist you in building equity faster. The more you put down, the more equity you begin with. If you can put at least 20% down, you get the added perk of not having to pay for PMI (Private Mortgage Insurance), which can be expensive.

Building equity is a huge benefit of being a homeowner. It’s like a forced savings account and can be one of the best investments you will ever make!

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

Photo Credits: moving.com, lunchboxarchitect.com, urockloans.com

If going green is important to you, you have probably considered installing a solar panel system to your home. While solar is certainly a smart long-term investment that can reduce your environmental footprint, it is important to understand the pros and cons of solar power so you can make the right decision for your home. Making your home more energy efficient is always a good thing, but there are a lot of solar power myths that are communicated via the media. Take time to do your research and educate yourself before purchasing a solar panel system!

PROS OF SOLAR ENERGY

• Lowers electric bills. This is the top benefit of using solar panels.  With solar power, you are generating your own electricity, thus becoming less reliant on your electric utility company. This, in turn, reduces your electric bill.  Because solar panel systems generally last 25-30 years, you can save money on your electric bill for decades!
   
• You can actually earn money using solar! Due to many Solar Incentives in the United States, solar panels not only generate bill savings, but also pay off in other ways.  Utilizing these incentives will allow you to be compensated for the electricity that your solar panels generate.
  
• It will give you some control over rising energy costs. The cost of electricity has risen by about 5% over the past decade and that trend of rising electric costs is expected to continue. However, the cost of solar has decreased more than 70% over the same ten years. By installing solar panels now, you will avoid rising energy costs!
   
• Improves the value of your home. Studies have shown that property values often increase after solar is installed.  So, even if you do not plan on staying in your current home long term, you can still reap the financial benefits of your solar panel investment when you sell.
   
• It reduces your carbon footprint and moves our country toward energy independence. This is what it is all about, right?  Saving money is a wonderful thing but saving our planet…that is priceless! Using solar power benefits our environment and at the same time, moves our country toward transitioning away from fossil fuels and being heavily reliant on fossil fuel producers abroad.

CONS OF SOLAR ENERGY

• Solar panels do not work on every type of roof. Because of the way solar panels are installed, not every type of roof will support them. If you have an older or historic home that has a roof made from slate or cedar tiles, it can be challenging for solar to be installed. Skylights and rooftop decks can also make solar installation difficult and costly. There are other options, such as ground mounted solar panels or buying a share in a Community Solar Garden.  So, even if you cannot have panels installed on your roof, you can still take advantage of solar energy.
  
• You may not get a return on your investment if you are about to move. While solar is a great financial investment, it does take a while to break even on it.  If you are planning to move within a few years, you may feel like they are an unworthy investment. However, as stated in the pros above, solar does increase the value of your home. So, if you buy your system with cash or a loan, you can still earn your money back when you sell your home.
   
• If you already have low electric costs, your solar savings will be low as well. Some people live in areas with low electric costs to begin with and in those cases a solar panel system will not be nearly as attractive as it is to someone who pays a high electric rate.
   
• Upfront costs can be intimidating. The total out-of-pocket price for a solar panel system depends on many things, including tax credits, rebates, and the financing you use.  But the upfront cost can seem overwhelming, especially if you don’t qualify for a Zero-Down Solar Loan.  Many people will not even consider solar panels because they feel they just cannot afford the cost.  That is why it is important to do research and find out about solar financing options. Solar Companies in Montgomery Alabama  

While rooftop solar panels are not the right choice for everyone, they clearly do provide many benefits to homeowners. Going green and decreasing your carbon footprint can be done in many ways.  With our country moving toward clean energy, solar is one of the most consumer- friendly options.

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

Photo Credits: cnn.com, greenmatch.co.uk, paksolarservices.com

Most real estate offers have contingencies, which are provisions that must be met for the transaction to go through. If the contingencies are not met, the buyer is entitled to walk away from the deal with their earnest money. The fewer contingencies there are, the more likely a contract will go through in a timely manner. Earnest Money

Here are five of the most common contingencies:

• Home inspection contingency. This contingency allows the buyer to have the home professionally inspected. If problems are found the buyer can request repairs by a certain date; generally, within five to seven days of the purchase agreement being signed. Depending on where you live, there may be requirements for repairs on structural defects, building code violations, and/or safety issues. But keep in mind that many repairs are negotiable, so there is wiggle room for the sellers to decide what repairs they are willing to make for the sale to go through.
  
• Appraisal contingency. A home must pass appraisal for a buyer to obtain a home loan. The appraisal is a process during which the property’s value is assessed by a neutral third party. The purpose of the appraisal is to be sure that the home’s worth is enough to cover the price of the mortgage. Usually, the home buyer pays for the appraisal, which typically takes place within 14 days of the sales contract being signed.
   
• Financing contingency. A financing contingency is also referred to as a loan contingency or mortgage contingency. It protects the buyer in the event their lender does not approve their mortgage. Although the timeframe for financing contingencies can vary, mortgage lenders report that buyers generally have about 21 days to obtain mortgage approval.
   
• Sale of current home contingency. Sometimes home buyers will make the purchase of the new home contingent upon the sale of their current home. Usually, buyers have a window of 30 to 90 days to sell their house before the sales agreement is voided. This contingency puts the seller at a disadvantage because the buyer’s house might not sell in time.
  
• Title contingency.  A buyer must “clear title” prior to having a mortgage approved. This is a process in which the buyer’s title company reviews any potential easements or agreements that are on public record. This ensures the buyer is becoming the rightful owner of the property and the lender is protected from ownership claims over liens, fraudulent claims from previous owners, clerical problems in courthouse documents, or forged signatures. Property Title Search: What it is and How it Works

These contingencies are common in most real estate sales contracts. However, the sale of current home contingency is used more often in a strong buyer’s market. Just remember that contingencies are negotiable!

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

Photo Credits: canva, lonestarfinancing.com, rismedia.com

Perhaps you have been thinking about purchasing a home, but you are not sure how much you need for a down payment. Many people will tell you that you need to have 20% to secure a mortgage. Thanks to various programs available to buyers, the truth is that you can put down as little as 3%. In fact, if you are a military veteran you could qualify for a Veterans Affairs Home Loan and not need a down payment at all! While these programs may mean that you do not have to save as much and you can get into a home sooner, there are some major benefits to making a 20% down payment if you can:

• YOU MAY QUALIFY FOR A LOWER INTEREST RATE

Putting 20% down vs a 3-5% down payment gives your lender/bank the confidence that you are financially stable and a good credit risk. With this confidence, they will be willing to give you a lower interest rate on your mortgage loan.

• YOU WILL PAY LESS OVER THE LONG RUN

With a bigger down payment, you will have a lower loan amount for your mortgage. That means you will be paying less interest. For example, if you make a 20% down payment, you will only pay interest on the remaining 80% of the loan. If you put only 5% down, the extra 15% on your loan will accrue interest and you will pay more over the long run.

• YOU WILL BE MORE APPEALING TO SELLERS

Chances are, you will be competing with other buyers for the same home. Like the mortgage lender/bank, sellers feel more confident in buyers who are making 20% or larger down payment. They will see you as a buyer who’s financing is more likely to be approved, thus ensuring the sale will go through.

• YOU WILL SAVE MONEY BY NOT HAVING TO PURCHASE PRIVATE MORTGAGE INSURANCE

Private Mortgage Insurance (PMI) is an insurance policy that protects the lender if you are unable to pay your mortgage. It comes to you in the form of a monthly fee included in your mortgage payment. It is required for all conforming, conventional loans that have down payments of less than 20%. If you make a down payment of 20% or more, this insurance is not required. 6 Reasons to Avoid Private Mortgage Insurance

• YOU WILL HAVE LOWER MONTHLY PAYMENTS

When you make a 20% down payment it will result in smaller mortgage payments. You are starting off with a smaller overall mortgage and saving the expense of PMI, therefore your monthly payments won’t be as high.

• YOU MAY BE ABLE TO AFFORD A MORE EXPENSIVE HOME

Let’s say you are budgeting for a $1,000 monthly mortgage payment. If you are able to get an interest rate of 3% on a 30-year mortgage, with a 5% down payment you can afford to buy a $171,000 home. But if you made a 20% down payment, you would be able to buy a $213,000 home and still maintain your budget of a $1,000 a month mortgage payment.

While putting 20% down on a home is not a requirement, and you can certainly purchase a house with less down, saving for a 20% down payment may be worth it thanks to advantages listed above!

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

Photo Credits: moneyunder30.com, usatoday.com, gobankingrates.com

Montgomery AL Home For Sale:

3452 Bankhead Ave, Montgomery AL 36111

MLS# 503019 | 6 Bedrooms | 3 Baths | 3,251 Square Feet | Edgewood

Virtual Tour

This marvelous mid-century modern is one of only a handful in Montgomery that is completely original and pristinely intact! Custom built in 1953 by a local family, no expense was spared in design and materials. Highly functional multiple living areas are flooded with light from vaulted skylights. Rich wood cabinetry with drawers and built-in glass front display cabinets abound in every hallway and pass through, affording endless storage. The original design includes an ample master suite with built in headboard and dresser PLUS 5 other bedrooms and two back-to-back baths for their growing family. Each of the "children's" bedrooms have built-in desks/shelving and storage. Outdoor living includes covered entry, covered side porch, and a third rear patio area, and the back yard is totally fenced for pets. Heirloom landscaping dots the property, along with mature trees and lots of privacy. Truly a museum quality one-of-a-kind find in prestigious Edgewood!

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

Montgomery AL Home for Sale: 

4624 Wares Ferry Rd, Montgomery AL 36109

MLS# 36109 | 3 Bedrooms | 2 Baths | 1,624 Square Feet | College Grove

Virtual Tour

Even on the approach to this home, you know it is something special...unlike any of its neighbors. Custom additions and renovations abound like the fencing in the front yard, landscaping, and tilework on the covered front porch. Once inside, the foyer with a shiplap accent wall welcomes you into a cozy living/dining room combo. If you are an HGTV fan, you will flip over the custom kitchen with hickory soft close cabinets, roll-out shelving, and a lazy susan to optimize storage. The two-drawer Fisher-Paykel dishwasher is a Godsend for singles or families, and the 5 burner stove allows you to cook lots all at once. Relax in the light filled den/family room with a real fireplace and stunning views out the picture window of the covered deck and big salt water swimming pool. Both bathrooms have been tastefully updated. Wake up to a perfect view of the gleaming pool every morning from the oversized master bedroom that boasts two closets. The backyard is a dream for entertaining large groups or just winding down after work. A detached workshop is wired and perfect for storing pool toys, lawn equipment, or even a man cave/she-shed (with a little creative work...). The metal roof is a huge plus, and the pool pump and liner are in good working order, as is the HVAC system. Zoned for desirable Dalraida elementary school, this home is truly one of the best homes in the area, and one you don't want to miss out on!

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