How to Save Money When Buying expandable modular homes

If you’re in the market to buy a house, a modular home could be a great option due to its energy efficiency, affordability and relatively fast build time compared to that of a traditional home. However, modular homes have historically been greatly misunderstood and commonly confused with other types of non-traditional houses, such as manufactured and mobile homes.

Link to Hongyu Dinghao

Like other popular house styles, modular homes come with certain pros and cons for home buyers and homeowners. Before deciding if a modular home is right for you, let’s first take a look at what a modular home is and then review the answers to some frequently asked questions about this type of house.

What is a modular home?

A modular home is a prefabricated house built in bulk in a climate- and quality-controlled factory. To build a modular house, individual sections called modules are constructed and then transported to the owner’s property where professional home builders will assemble the completed house onto a permanent foundation.

Modular homes have traditionally carried some negative connotations – such as the idea that they’re not as structurally sound as a standard “stick-built” house. However, the overall quality of modular homes has improved drastically over the years. In fact, it’s often almost impossible to tell the difference between a modular home and a traditional home.

Modular vs. manufactured vs. mobile homes

Modular homes are often confused with manufactured – or “mobile” – homes because their names are sometimes used interchangeably. While these types of homes do have some similarities, each is unique in the way it’s built.

For example, modular homes are built in sections and then assembled into a complete home on-site. On the other hand, manufactured homes – the modern-day term for mobile homes – are built entirely on a chassis to ensure they’re always mobile. Another difference between modular and manufactured homes is that construction of manufactured homes is regulated by the Department of Housing and Urban Development (HUD), whereas modular homes are subject to codes set by the local governing body.

Finally, home buyers may have to finance a manufactured home differently than a modular home. Typically, it’s harder to get a mortgage for a manufactured home since it’s not permanently affixed to the property. In this case, a lender may not consider the house real property – rather, it’s deemed personal property, and a mortgage isn’t a financing option.

That's not to say getting an affordable mortgage on a manufactured home isn't doable. You can get financing through Rocket Mortgage®. There are three primary considerations if you're looking into this:

• The home has to be permanently affixed to a foundation.
• It has to be titled as real property attached to the land.
• The home must have a HUD tag and has to be made after June 15, . Prior to that date, there weren't today's safety standards in place from HUD. Homes built prior to this date are referred to as "mobile homes."

FHA loans for manufactured homes require a foundation inspection according to the standards set by the Permanent Foundations Guide for Manufactured Housing. If you've had a prior inspection, that can be used to qualify.

How much do modular homes cost?

Since modular homes come in numerous shapes and sizes, costs vary from house to house. According to HomeAdvisor, the average price per square foot of a modular home is $100 – $200, not including the cost of labor, installations, etc. This means a 1,000 square foot modular home can cost up to $200,000.

Customized modular homes are more expensive per square foot, depending on the level of personalization. To put this in perspective, a customized modular home can cost anywhere from $350,000 to over $1 million.

How to buy a modular home

If you determine that a modular home suits your needs, the first step is to find and purchase land where you can establish a new home. Don’t forget that a modular house will need to comply with the local building codes and zoning requirements, so be sure to select a property where a modular home is permitted.

Then, you’ll shop around for a reputable building company and select your floorplans and customizations before the project begins. At this point, you’ll also need to seek out a construction loan to pay your home builders once the house is complete. Once construction concludes, you can install electrical work and an HVAC, and furnish the house.

Want more information on expandable modular homes? Feel free to contact us.

When your modular home is permanently established and deemed real property, you can transition to a standard mortgage, expanding your financing options. Remember, when choosing a mortgage lender, it’s best to shop around for the best interest rate and loan terms before you commit.

Modular home FAQs

If you still have some lingering questions about modular homes, we’ve got answers for you.

Do modular homes hold their value?

Modular homes hold their value the same way a stick-built home does. As long as a homeowner takes proper care of their home and makes necessary repairs and improvements, a modular home can hold its value.

Are modular homes a good investment?

Because modular homes can hold their value and appreciate over time, a modular home can be a good investment in many situations. To increase resale value, consider making worthwhile home improvements and working with a real estate agent to discover comparable home sales in the area you’re building in.

Can modular homes have basements?

Yes, many modular homes have a basement. Consider during the planning stage of your modular house construction whether you’ll prefer a basement.

How long do modular homes last?

Modular homes can last up to 100 years, but their longevity depends on several factors – including but not limited to the durability of the materials used to build them, and how well the owners maintain the home.

So you’re a little over-budget on your modular home project. It’s alright, it happens to the best of us. It’s human nature to always want a little bit more, but we also have to know where to draw the line so we don’t overextend ourselves. There are a couple ways to deal with this problem; reduce the cost of items and services currently on your list, reduce labor costs by doing some work yourself, increase the loan amount from the bank, and/or cut back on optional amenities.

Reducing the Cost of Items and Services

The very first thing you should do before you start slashing amenities left and right is ask both your manufacturer and GC if there’s any wiggle room on the pricing that they’ve given you. The best way to do this is to ask your GC if there are any custom tasks or items that the manufacturer is attending to that he and his team can do for less money. This would include tasks like adding a skylight or any specialty features that require items a manufacturer wouldn’t buy in bulk.

Getting your GC to reduce his labor costs is tricky because he is generally working with multiple subcontractors who get paid a set rate. One way to get his costs down is to go back to the different proposals you received from other GCs and look for areas where they estimated lower costs and find out why. There may be a cheaper or more efficient way to complete a task that your GC doesn’t know about. This will be especially true with GCs who have minimal modular experience.

Always remember though that like any good relationship, it’s the GC’s job to keep you happy, but it’s also your job to keep the GC happy.Don’t compromise your working relationship by asking the GC to take a reduced wage or by cutting funding to areas that he says can’t take a cut.

“It’s the GC’s job to keep you happy, but it’s also your job to keep the GC happy”

Do Some Work Yourself

One easy way to reduce costs is to avoid paying some wages by doing work yourself. Ask your GC what tasks he might recommend doing. These should be simple enough that a non-professional can do a good job, yet time consuming enough that you’ll save some serious money not having to pay a professional an hourly wage to get it done. If you can get friends to help out, the more the merrier, just make sure that your construction insurance covers any injuries sustained by non-professionals. Your GC will be able to tell you exactly what will be covered.

Cut Back On Optional Amenities

The marble countertop example is a good one. Ask your GC which optional features you have that would be the least expensive to upgrade at a later date. It’s much easier to get a standard vinyl or wood countertop now and upgrade to marble later on than it is to add additional square footage or more expensive insulation. Some big ticket expenses can be saved for later as well. If you’re finishing a basement or an attic, consider holding off; it won’t be any more difficult to upgrade them later.

Are you interested in learning more about expandable shipping container homes? Contact us today to secure an expert consultation!

Increase Your Budget