Budgeting to buy a new manufactured home is an important part of the planning process. First, you need to know how much home you can buy before you begin shopping. Plus, you also want to make sure you have enough extra room in your budget for emergencies and other expenses that may pop up during the home buying process. If you're looking forward to buying a new manufactured home, here are a few tips to get you started with a budget.
Your Current Bills
The first step to building any budget is assessing your current bills. It is best to sit down and make a list of all your current bills, grouping them according to category. This is because some of these bills will carry over to your new home, such as existing credit card payments, auto loans, or student loans. Meanwhile, other bills are likely to change in your new home, like your monthly rent payment will become a monthly mortgage payment, and your old utility bills are likely to increase if your new manufactured home is larger than your current residence.
The other part of this equation is estimating your current income. It is important that your budget is based upon a reliable and steady income, not an inflated income. Thus, if you have been using overtime to pay off debt or save up for a down payment, you probably don't want to budget for that overtime to continue indefinitely once you move. Be mindful of how much reliable income you will be bringing in each month to serve as a base point for your budget.
Creating Your Budget
If all of the numbers were going to stay the same, you could simply subtract your current bills from your monthly income to determine how much money you can afford to spend on a house. However, since many of these numbers are changing, you will need to estimate conservatively to ensure that you are buying a home that is well within your budget. For instance, if you've been paying $800/month in rent, you may be tempted to say that you can afford a $800/month mortgage payment. In reality, you will need to leave extra room for homeowner's insurance, repair bills, and increased utilities, so you may only be able to afford a $600/month mortgage. This is okay because manufactured homes are usually much more affordable than traditional homes, and you can find plenty of homes in this price range. You just have to be aware of what you're looking for when you go shopping for the first time.
In addition to the sheer numbers that you come up with, you should also be mindful of certain financing guidelines. For instance, most lenders will not want you to spend more than 30% of your gross monthly income on your housing. Thus, even if you have very few other bills to contend with, your lender may limit the amount of house you can buy based on a percentage of your income alone. You will want to closely document all sources of income that may affect this number so you have more options when it’s time to buy.
Once you've settled on a comfortable budget for buying a manufactured home, it's time to start house shopping. The good news is that manufactured homes are often displayed locally so that you can walk through a variety of model homes and choose the one that best suits you. In addition, you can customize the home in many ways to make it fit your budget by selecting different trim and appliance options along the way. This makes it easy for many people to afford a manufactured home that is just right for them.