Originally Written by Misty D. at claytonhomes.com
August 9, 2021
From making a must-have features list for your home to considering different loan types, check out these tips that can help make your journey to homeownership easier!
Thinking of buying a manufactured or modular home but not entirely sure how to prepare yourself financially? Whether you are a first-time home buyer, or it’s been some time since you last bought a home, we can help you get ready. Follow these pre-purchase tips to make sure your home buying process goes smoothly:
1. Know What You Need and Want in a Home.
Before you jump into house hunting, talk with your family or partner about what your new home needs to have. Ask yourself questions about what kind of home you’re looking for, ranging from what floor plans you prefer to if you need a laundry room or another specific space. After all, you want to be happy and comfortable where you live, so seriously considering what type of home best fits your needs should be a first step.
Examples to consider:
- Do you need more room than you have in your current space? Note the minimum number of bedrooms you want or add storage features to your must-have list.
- Does a family member work remotely or take online classes? A flex space or private office can be high priority when you’re searching for a new home.
- Don’t forget about your hobbies. Love to bake or repurpose furniture? Look for homes with plenty of counterspace and a kitchen island or opt for a garage as your workshop.
Having features like these prioritized will help your narrow down your home search and keep you focused as you move into figuring out your budget.
2. Evaluate How Much You Can Afford.
Look at your monthly income and calculate how much you can put toward a monthly payment and homeowners insurance. It’s also a good idea to factor in any other costs that commonly occur when you own a home. For example, if you currently live in an apartment without a yard, remember there may be additional upkeep costs for lawn care to factor in your budget.
Being realistic about your finances will help you figure out what home price range you should be searching in. We suggest you start budgeting for a couple of months as if you were already making these payments to get used to any changes compared to your current costs and see how comfortable you are financially. If you feel like money is a little tight, you may want to reevaluate what you can afford or make some adjustment to your budget.
We also recommend avoiding adding any extra debts or credit inquiries that come from making big purchases like a new car or applying for a new credit card while you’re actively trying to buy a home. These can affect your credit score and limit your home buying budget.
3. Check Your Credit.
Your credit score is an important factor that lenders consider when making a decision about offering you a home loan. It can affect the loan amounts and interest rates you qualify for. Avoid any surprises by checking your credit score for free before applying for a loan. Also, if you see any incorrect information listed in your history, you can dispute any errors that may be hurting your score. If your score is not where you want it to be, you can start taking steps to improve your credit as you save for a home.
4. Save Up for Additional Costs.
When purchasing a home, it’s important to remember there can be additional costs involved beyond the down payment. Prepare by saving up for items like closing costs, which can vary based on the price of the home you’re purchasing and the loan you choose. Also, if you currently have a manufactured home you want to trade in, talk to lenders about how your trade-in could help with the down payment amount for your new manufactured or modular home.
5. Research Types of Loans.
Some loan types may be a better fit for you than others. Learn about the requirements for different loans to ask your lender about. Several options, but not all, include conventional, FHA, USDA or VA loans. USDA loans are typically meant more for home buyers in rural areas, and VA loans are for service members and veterans or their spouses. Also, you can learn more at HUD.gov about first-time homebuying programs that may be available in your state.
6. Find a Home.
Of course, you can’t forget the fun part of house hunting. At Clayton, we want to make finding a home easier, which is why you can search online for manufactured and modular homes available near you and filter them by the number of bedrooms, square feet or features you want. Create a Favorites account to keep track of your top picks, and when you are ready, you can visit your local home center to tour homes and talk to our home consultants.
7. Inquire with Different Lenders.
Depending on the lender, loan terms and fees can vary, as well as the types of loans they can offer. When choosing your mortgage lender, compare interest rates, the specific loan fees and the required down payment. Also ask each lender if they have programs available for down payment assistance.
If you have any additional questions, be sure to ask your lender to help you better understand the process.
8. Prepare Your Documents Early.
You can ask lenders for a checklist of information you may need to provide for a loan, but most lenders will ask for common documentation relating to employment history and proof of income. Here are some examples of what you could be asked to provide:
- Tax returns and W-2s/1099s for the last 2 years
- Current pay stubs
- Your Social Security card and driver’s license or ID
- Bank statements from the last 3-6 months
- If applicable, documentation for income from retirement, Social Security, alimony, child support, etc.
Locating and organizing these documents as early as possible can help the process run more smoothly and get your information verified faster.