Help for a first time home buyer!!!!!!!!!!!!!!!!!?

Question

My husband and I are ready to buy our first home. The market in our area is strange. It is a small town so average wages are fairly low. And real estate is pretty high. It's only BELOW $40,000. if it is just barley liveable. Anything that only needs cosmetic work done to it is $75,000. and up! To me that is ridiculous! We do not want any more headaches, so we have decidied to go with a modular or, site built home, on about a 1/2 an acre of land. Since we are first timers, and a modular home is not considered a "trailer" , what would our options be as far as deals for first timers? What would be some good questions to ask the builder, and loan agent? What would be some thing we need to watch out for? Any suggestion?

We are moving, and plan to stay put! Whatever we choose is where we plan to stay.

Answer 1

Unfortunately the prices of existing homes always seem outrageous. But on the plus side, a house with a $75,000 price tag at a 30-yr. fixed OR adjustable rate will be cheaper than rent. The important thing is it'll be YOURS! You'll be building equity.
There's nothing wrong with a modular. Just be aware of some chemicals in the structure that may make you feel nauseated.
As you've surmised by now, don't contact some stranger on the internet who will be a spammer.
Be patient as you jump through the hoops. I call it "the country club of home ownership."

Answer 2

I live in a fairly small town, and there is very little under $100,000 that is in decent shape, so I know what you are feeling. It makes it difficult for couples starting out to afford home ownership.

First, check to make sure the zoning (if you have it) will allow a MH. Zoning can be difficult and expensive to change if you need it changed for your plans.

Modulars are not inexpensive, especially if you need site prep. Having utilities put in can be VERY expensive, so before you sign anything, check out the costs of adding utilities. There is a lot in my area that has city water and sewer run to it, but it had been capped when the previous home was removed, it is over $6,000 to have the service reconnected. If you are running electrical and the current service has to be updated or expanded before your service can be added, it can be several thousand dollars for a new transformer and lines. These are important things to consider.

Next, modular homes, no matter how nice they are, do not appreciate the way stick built homes do. Do make sure you are getting a full foundation with tie downs, it will make it easier to insure and sell down the road.

Most likely, the manufacturer will have loan programs available to you, but don't be afraid to check around. Some lenders will not loan on a MH, some only 75% - 80% of value. When you are ordering your MH, don't be afraid to ask for upgrades at no charge to you. And if you are being charged for some of the upgrades, keep a close eye on the bottom line, it can shoot up in a hurry.

Can't recommend you buy a modular, but if you do, make sure you understand everything you are getting for your money, and what you aren't.

Answer 3

It appears as though you have done some homework on the modular homes and land. Building your own is one way to get what you want in your desired area. Remembering those have to have all the below ground work done as well, and generally is expensive. In our area, some of the pre-building work costs $25,000-35,000. Perk tests for the septic or sewage drainage. Tests for how low the water table is, and or depth to bring it to the surface for a well, or if you have to tie into the city water system, costs for that. Electricity being run to the property from the closest pole to your desired spot. All that is additional costs, and you should know an estimate within a few thousand dollars for all that. Then the slab foundation work to set the modular on. And the finish work to the cabinetry etc. I think by the time you figure out the costs for everything you will certainly be close to the $75,000- or over that cost. Cosmetics are minimal....elbow grease, time paint. Simple. Structure, not so much fun, and the age of the home in that range is critical. Personally, my 2700 sq ft home built in 1978 on a slab, has been a very sound structure, however we are all electric.....I would not like to purchase another all electric home unless I won a huge lottery. Our electric costs range from 290.00-380.00 every month. THINK SOLAR, THINK GREEN if you build.....and bite the bullet now in the decision making, as it will pay off later over time. If I was going to build I would not do it on only a 1/2 acre either. Often a first time buyer if you check with a good realtor out for you and not themself will show you re-po's and some of those are very cheap. You will have to work on the house and property, but the savings can be immense in the long term and re-sale value. Give yourselves 3-5 years in your first home, fix it up build the equity and sell for something better. That is how nearly all of us get up in the home market.
Buy small, then you sell to another first timer. Good Luck and take your time it is a buyers market now....

Answer 4

I think you're making a smart decision. I assume you already have the land and it's paid for? For a modular, you should be able to finance it like a site-built home. Here's one such example:
http://www.signaturecustomhomes.com/financing/

Where things can become complicated is you may need a construction-to-permanent mortgage and there are fewer of those out there than the standard purchase of an existing house.

You might want to consult a mortgage broker to see what your best deal could be. If you belong to or are eligible for a credit union, that could be a money saver. Consider places like ING Direct as well which also offers mortgages. At some stage as it sounds like you will have no real estate broker, I'd fork over for a real estate attorney. This is likely to be the most expensive buy of your life and you really, literally, can't afford to get taken advantage of by anyone. As a first-time buyer, you just can't know all the things to look out for. It will cost some bucks, but with a lawyer, people will also likely forego some BS they might try otherwise.

Make sure all the zoning issues are completely dealt with. Though it's not a mobile, some idiots have prohibitions against modular homes (they don't understand construction apparently, but have legal authority. You'll find a lot of that kind of nonsense out there.) Make sure your DEED allows for a modular and that you meet any restrictions--size, stories, color palette, etc. can all be deed restricted.

Good disclosure of what the manufacturer's warranty is is needed. Find out about insurance costs. How much modification can you do? How much do they charge for it? Please, get it made ENERGY EFFICIENT. Those prices will only skyrocket. Everything from using passive solar to good insulation should be done before it's built to save bucks--can sometimes also affect mortgages.

Consider making it ADA accessible--you'll be glad you did and it will have a higher resale--zero step, wider doors, roll under kitchen and at least one bathroom sink, roll in or snail shower, etc. Reinforce for grab bars, but you don't have to put those in now--just now you CAN.

Make it low maintenance. Houses are far more expensive than people realize anyway--you don't want stuff you have to mess with constantly--no bizarre landscaping, watch the glass windows (lose energy and you have to clean them as well as posing a security issue). Carpeting is like a puppy--a lot of work. Why not go for cork? tile? laminate? hardwood? Something you don't have to replace and scrub, etc. all the time. If you love fabric, put some area rugs down.

Always demand the bottom line on anything. Example, with mortgages, there is a Yield Spread Premium that may or may not be disclosed up front. A YSP is a cash rebate to a mortgage broker for selling an interest rate above the wholesale par rate that the borrower qualifies for. Retail lenders get them as well but don't have to disclose them. Trust me, everyone is making as much on this deal as he can, but what should matter to YOU is the bottom line: how much does anything cost. They can tart up the language all they want, but that doesn't put money in your pocket.
This is also why you see these DEADLY "creative mortgages" where you get a $200K loan for $700/month. READ THE FINE PRINT. You're going to be so in the hole with a joke like that. Definitely AVOID a pre-payment penalty in a mortgage. I'd also get a 30-year-fixed. Skip the argument for the 15 because "stuff" happens. Here's how you get the benefit of the shorter loan with NO downside to you:
each month, write a separate check and put in the memo line "principle only" and you will eat away at the time you have to pay the loan. IF something happens (lay off, major expense) you are NOT committed to the larger or extra money. Some will carry on about the beauty of the mortgage tax deduction. So far it is deductible BUT you're not making money on it and your home is vulnerable (look at number of folks in foreclosure, not all of whom made foolish buys). Having a mortgage-free house is a blessing and worth a few measly dollars in a tax deduction. You can do other things for tax deductions.

Good luck!

Answer 5

First of all how long do you plan on staying in a modular home such as the one you want to buy???? Most people still regard modular homes as "trailers" so to speak.......you are making an investment...find out what the resale value is on a modular home...that is very important....most modular homes and "trailers" do hot have a very high resale value....you do not want to lose money on real estate, you want to make money eventually when you sell. Make sure your modular home is well, well insulated.....the older model trailers were not insulated very well and heating costs are sky high. What is the value overall of the area you are building in?? Are you satisfied just to break even when you are ready to move out of a modular home???
You may be better off in the long run buying a regular house.....think it over and confide in a top notch real estate agent who knows your area and what modular homes bring....