Real Estate Information Archive

Closing on a home is the final step to the home selling/buying process. It can feel stressful and overwhelming, especially to first-timers.

Here are some things that most often go wrong with home closings, and how to avoid them!

• WALK-THROUGH

A walk through of the home is done before closing to confirm that everything is as it was when you signed the purchase agreement. It’s also the time to make sure any repairs that you requested were completed. If you get to your walk-through and discover that the owner took the washer and dryer they had agreed to leave or there were agreed upon repairs not done, your closing will definitely be put on hold. Money may be placed in escrow to cover the costs and deadlines may be extended.

• FEES

You will want to look at a copy of your HUD-1 Settlement Statement before going to your closing so that you can look over all the fees and ask questions should you have any. Fees on the statement will include those from your lender, closing attorney, city, insurance, surveys, and transaction fees among other things. You don’t want to get all the way to your closing and find out there are fees you weren’t aware of which may delay proceedings.

• TITLE SEARCH

Make sure the title search is completed with plenty of time to deal with any issues that may arise. A professional title examiner should be utilized by your closing attorney to be sure there are no defects on the title that would prevent the property from being sold. If the title search is done at the last minute and there are problems, it might take a long time to fix, thus holding up the closing.

• WIRE TRANSFER

The wire transfer of funds needs to arrive within a specific window of time for closing.  An issue with the wire can hold up closing. It’s vital to check with your lender and closing attorney to be sure that all parties have the correct wire information and timelines.

• CLOSING PACKAGE

A common problem that delays closings is the Closing Package not being ready. At the end of the loan process, there are a lot of loose ends that must be tied up and they can sometimes cause delays. Timing is everything. You may be scheduled to close at 11:00 AM, but if your package isn’t ready until 2:00 PM and your lender and attorney has other closings scheduled, your closing may be postponed to the next day.

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://homesforsaleinmontgomeryalabama.com for more information.

There was some good news for buyers this week as mortgage rates continued a recent downslide. So, if you are questioning whether you should buy or rent a home, now may be 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. Buy Calculator you can see how buying is a better financial option than renting. For example, after 4 years, the cost of homeownership (down payment, mortgage, taxes, etc.) for a $300,000 home would be $143,564. The total cost to rent the same house for that period would be $102,022. Renting would leave you with $41,543 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 $79,736 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 for more than 3 years and 9 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!

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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Purchasing your first home is a huge milestone…and not one that should be taken lightly. It is a big commitment, and you want to make sure you get it right. Educating yourself before you begin the home buying process will help you find the right property and procure the financing for it. 

Here are some things you should know as a first-time homebuyer:

PEOPLE INVOLVED IN THE HOME BUYING PROCESS

Entering the home buying process for the first time might feel a little overwhelming. You will have a lot of questions, but don’t worry, there will be people who will guide you through. The first thing to do is to find an experienced, professional Realtor. Your Realtor will assist you in finding your starter home, making an offer, and negotiating with sellers. Another person you should meet with prior to starting your home search is a mortgage lender. Your mortgage banker will help you complete your loan application along with determining the amount you qualify for.

Getting preapproved for a mortgage is an important step that will set you on the right course for buying your first home.

STARTING YOUR HOME SEARCH

I’m sure you’ve heard the saying “location, location, location” in relation to real estate. It exists for a reason. Because location is one of the most important aspects in choosing a home. The first thing you must do when searching for your starter home is determine the area you want to live in. You should take many things into consideration when making this decision. Do you want city, suburban, or country living? What is the reputation of the school system?  Are there shopping, dining, and entertainment activities nearby?  The answers to these questions aren’t just important for you when you are living there but may also have an impact on resale value. Remember, this is your starter home; not necessarily your forever home. So, you should take resale value into consideration when choosing the location. Once you have determined WHERE you want to look, you can create a list of what you are looking for in a home. You may have to compromise on some things, but going into your search knowing what you want will make things less confusing. 

FINANCIAL IMPLICATIONS

When buying your starter home, there may be some expenses that you didn’t anticipate. Don’t risk being blindsided by unexpected expenses. Do your research and make sure you know what you are getting into. Here are some costs you may not have thought of:

• Closing costs
• Home inspection
• Moving expenses
• Setting up your new house

Remember that your Realtor and Mortgage Banker are there to answer questions you may have, so don’t hesitate to take advantage of their expertise!

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: pwcva.gov, findmywayhome.com, financebuzz.com

Spring is approaching and with it, prime time for real estate transactions. Many people will be looking to purchase homes meaning home buying will become a “competitive sport”. This means that you will need to stand out to sellers if you want to “win” the house of your dreams. One way to show that you are serious about buying your dream home is to get pre-approved for a mortgage before starting your search. In fact, regardless of how competitive the market is, getting a mortgage pre-approval will give you the security of knowing what your true budget is, allowing you to know if a desired home is within your reach.

One of the many advantages of working with a local Realtor is that many have relationships with lenders who will be able to help you with this process. Once you have chosen a lender, you will need to fill out their loan application and provide them with vital information regarding your credit, debt, work history, down payment, and residential history.

There are “5 Cs” that aid in determining the amount you will be qualified to borrow:

1. Capacity: Your current and future ability to make payments.
2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash.
3. Collateral: The home or type of home that you want to purchase.
4. Character: Your history of paying bills and other debts on time.
5. Conditions: Current interest rates and amount of principal influence the lender’s likelihood of financing the borrower.

Getting pre-approved not only shows sellers you are serious, but also speeds up the process of completing the purchase once your offer has been accepted.

Even before you contact a mortgage lender, it’s a good idea to look at your credit score to see where you stand.

Here are some steps you can take to improve your credit score:

• Check your report for errors. If you find errors, dispute them with the credit bureaus. Having errors removed can improve your score.
• If possible, pay down balances on credit cards.
• Resolve collection accounts. If you have any accounts past due, it will have a negative effect on your credit report.
• Open a secured credit card. If your score is low, this can be an effective way to raise it.

Purchasing a new home is exciting but can also be stressful. Getting pre-approved for a mortgage will help alleviate some of that stress. So, if you are in the market to buy a house this spring, contact mortgage lenders now and get the process started!

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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Buying your first home is exciting. After getting approved for a mortgage loan, working with a professional Realtor and finding your dream home, it’s time to settle in and start enjoying your new digs. Then BAM!  The shock of an unexpected expense slaps you in the face. Don’t let that happen to you. Being informed about the possible expenses of being a homeowner will not make spending the money any more fun, but at least you will be prepared. 

Here are some ancillary costs of homeownership that you should be aware of:

1. CLOSING COSTS

When closing on your mortgage you will be presented with a long list of costs: mortgage taxes, lender application fees, attorney’s fees, title insurance, recording fees and any potential real estate tax reimbursements if the seller has paid them up front. Altogether, closing costs are an average of 2 to 5 percent of the total cost of the home. They will vary from state to state.

2. HOME MAINTENANCE
   

Now that you are a homeowner, you are solely responsible for the maintenance and upkeep of your property. Everything from yardwork to cleaning; pressure washing to clearing the gutters…it’s all in your hands and on your dime. Oh…and fixing things. Yeah. When the AC isn’t working or there is a leaky faucet, you will be footing the bill for repairs. This all sounds a bit overwhelming, but the key is to be prepared. Go into your home purchase knowing that you will likely be spending about 1% of the purchase price of your home on maintenance annually.

3. PROPERTY TAXES

Property taxes vary by state and can also vary based on city, ordinance, and even specific house. You can utilize a Property Tax Calculator to get an idea of what your taxes will be when planning for your expenses.

4. UTILITIES
   

If you’re coming from a rental where your utilities were included with the rent, you may not have considered how much you will need to set aside to pay for electricity, gas, water, and sewage costs. Added to internet, cable and phone bills, it can be quite a chunk of change. Planning for utility costs is crucial to making sure you can afford to live in a home of your own.

5. HOMEOWNER’S INSURANCE
   
   When you get a mortgage, you must get homeowner’s insurance as well. Be sure to do your homework and shop around for the best possible price. You can get discounts for things like security systems, working from home or bundling coverage for your home with your auto insurance policy. Educate yourself on what your insurance policy covers so that you’re not left disappointed when you must pay for something you thought would be taken care of.

Don’t let these expenses scare you off from purchasing a home. Again, the key is to be aware of them going in so that you won’t be caught unawares when they come up.

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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Purchasing your first house is a monumental milestone in life.  It’s likely the largest financial commitment you will have made up to this point. You want to get it right. Here is a basic overview of five essential things you need to know when taking this step.

1. HIRE A REALTOR

Having an agent will save you time. They can send you listings directly from the MLS that fit your wants/needs and you won’t waste time looking at properties that might already be under contract. Realtors are also often aware of new listings that are not yet on the market. And while house hunting, there is no point in wasting your gas when an agent will pick you up and provide transportation. The advice you will receive from a qualified Realtor will be invaluable in the buying process.

2. DECIDE WHAT YOU ARE LOOKING FOR
    

Searching for the right home can be overwhelming, especially if you’re not even sure what you want. Come up with a list of must-haves and desires that you can present to your Realtor so that they can provide listings that fit those parameters.

3. GET A LOAN

It is smart to get loan preapproval prior to making an offer on a house…especially if it is a seller’s market where you may be competing with other buyers. Sellers want assurance that you will be able to complete the purchase of the home.

4. NEGOTIATE THE OFFER

Don’t make the mistake of comparing the sale price to other homes you have seen because the truth is, sellers can ask any amount they want for a house. Your Realtor can provide you with comparable sales of similar houses in the same condition and location over the past few months.

5. GET A HOME INSPECTION

Some states will allow you to have a home inspection prior to making an offer on a home. In other states, the inspection becomes a contract contingency, meaning the buyer has the right to cancel the contract. Either way, you don’t want to get locked into purchasing a home that has a faulty foundation, for example.

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: propertyupdate.com.au, landmarkhw.com, homeownershipmatters.realtor

With Christmas right around the corner, you might already be thinking about your new year’s resolutions. And if those resolutions include buying a home, it’s never too early to start considering how you can defeat debt in order to achieve your dream of homeownership!

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Realtors see two major challenges time and time again with first time home buyers that effect their ability to purchase a home:

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!

• 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.

• 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.

• 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.

• CUT EXPENSES AND MAKE 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. 

• 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.

• SEEK LOWER 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.

• 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!

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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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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You may make a lot of financial investments in your lifetime, but owning a home is likely the largest investment you will ever make. Because it is such a large investment, it takes a long time to pay it off. In fact, it can feel like it takes a lifetime to finally own your home outright. But the truth is, there are ways to shorten the process so that you can pay off your mortgage sooner rather than later.

Here are some options for paying off your mortgage’s entire principal (plus interest) quicker:

• Biweekly Payments

Most people make mortgage payments monthly. But if it’s within your budget AND your lender allows it, you can make two payments every month. When you make biweekly payments, they still must equal the amount of your required monthly payment. However, remember that every time you make a payment it goes toward the interest you’ve accrued first. By making payments every two weeks, that leaves less time for interest to increase. That means more of your money will go towards your principal balance, thus allowing you to pay off your mortgage faster. Keep in mind that not all lenders will accept biweekly payments, so be sure to check with them first.

• Unexpected Income

Any substantial and unforeseen monetary gain is a “windfall”. Windfall income is exciting and can be used in a plethora of ways. If the idea of paying on your mortgage for 30 years, you may want to consider using windfall income to pay of your loan faster.

Examples of windfall income are:

• Credit card cash-back rewards
• Tax refunds
• Inheritance
• Lawsuit settlements
• Property sales
• Raises
• Work bonuses
• Lottery winnings

Not everyone will have windfall income during their life, but for those who do, it can be a great way to put a dent in your mortgage’s outstanding balance.

• Refinance to a Shorter Loan Term

If paying off your mortgage faster is a goal for you, refinancing to a shorter loan term is a great way to do it. Refinancing involves paying off your existing mortgage so you can replace it with another in order to save money or pay off your loan sooner. You might be surprised to discover that changing from a 30-year to a 20- or 15-year loan will only raise your monthly payment by a few hundred dollars. So, if your financial status has improved since you first purchased your home, and your budget can withstand a larger payment, you can knock thousands of dollars in interest off the life of your loan. It’s a good idea to shop around for the best rate if you want to refinance, as you don’t have to stay with your current lender.

• Make Extra Payments Towards Principal

The “principal” of your mortgage is the amount you borrowed and have to pay back. Your monthly payments usually include your principal, interest, insurance and taxes. You can pay off your mortgage more quickly by simply paying extra towards your principal occasionally or even making an extra, large payment towards your principal once a year. You can do this with money you have budgeted for that purpose or if your income has changed in a way that allows for it.

If you are considering options to pay your mortgage off faster, the first step to take is to speak with a mortgage banker. They have the expertise to give you the best advice for practical solutions that will work 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.

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Do you have more house than you need? Perhaps you’ve recently become an empty-nester and don’t need a home spacious enough for a large family anymore. Or maybe you are just tired of trying to keep up with the cleaning and maintenance that a large property requires. Whatever the reason, maybe it’s time to consider downsizing.

Here are 5 perks of downsizing to a smaller home:

1. YOU WILL SPEND LESS MONEY

You will not only save on your monthly mortgage payment in a smaller home, you will also save money on frivolous living. One of the advantages of downsizing your home is that you can stop wasting money on furniture and home décor that are used to fill space rather than to fulfill a function. Filling a smaller space will allow you to prioritize what items are important and necessary for you.

2. THERE WILL BE LESS STRESS

After working hard all week to pay the bills, it’s no fun to have to spend your weekend doing chores. A smaller home equals fewer chores and less upkeep. This will free up time to enjoy leisure activities, hobbies, and relaxation. Imagine weekends spent doing fun outdoor activities, spending time with family and friends or just simply chilling out and reading a good book. Those things sure sound a lot less stressful than doing endless yardwork and household chores.

3. YOU WILL REDUCE YOUR CARBON FOOTPRINT

If you live in a large home, you know that energy costs can be expensive. Smaller homes will not only save you money on heating, cooling, and water costs, it will also allow you to reduce your carbon footprint.

4. IT WILL FREE UP TIME FOR TRAVEL

With additional disposable income and less upkeep needed, a smaller home will afford you the time and cash for travel and adventure. Weekend getaways or even long trips are less of a hassle now that you don’t have to worry about doing lots of home maintenance and being house-poor.

5. IT PROVIDES A FRESH START

Downsizing can be the beginning of a new chapter in your life. If being an empty-nester has you feeling down, a lifestyle change might be just what you need to start focusing on how you want to spend your time, money and energy. 

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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