Which is cheaper- adding on or buying bigger?

[Beth]

We just found out we cannot put our park model home on a basement. We had been planning on moving our home to land and putting it on basement in order to have a family room, storage, office area etc. We also planned on building a garage and possibly adding on to our home at a later date.

We were told it would cost around $25,000 for a basement in our area, which to us is a whole lot of money! So we are wondering what would be the better option at this point:

keeping our existing home, moving it to land on a foundation and building a garage at first for storage. Then as time and money permits adding on a sizeable addition to include a dining room, family room, and office area. Our home is about 1100 square feet at the moment.

Our second option would be to sell our home, hopefully at least get our deposit back and put that towards buying a newer, bigger home to put on land (on a foundation). If we bought a bigger home I'm thinking we would want something around 1600 square feet, with a family room and dining room. Then we would still want the garage for storage. The office area could be put in the family room for the time being. Later we would probably still add on a little but it wouldn't be as crucial as with our smaller home.

I know prices vary in all parts of the country, we are in Michigan. Just wondering if anyone knows if you are better off keeping the old and adding on, or just going with the new? We plan to talk to some contractors to get quotes. Our ultimate goal is to have a nice home on our own land with not too huge monthly payments. We would like to have payments under $800 if possible.

Has anyone gone through this themselves? What is the best option? I just hate to pick the wrong option and then find out we made the wrong decision. Any and all advice/info would be greatly appreciated!

Thanks!

[rmurray]

I would suggest you do it right...plan now for your needs in future years...finance with a mortgage and take advantage of todays very low rates...you have not mentioned how much you owe on the land....but a new 1600 foot home very deluxe should not be much more than $65K...2 car garage...$16K...800 principle and interest will cover a loan of about $115K....This should work..

[Beth]

Thanks! Right now we don't own any land, we are still in the park, but we are looking at spending around $25,000 for land. In this area that will get you an acre or slightly less which is what we want. We would spend more if it already had a well or septic of course.

Beth

[cmtfromga]

I would do some investigating before you build onto your mobile home. Take into consideration that one day you may want to move especially if you have children

We have a doublewide that the original owner built a garage onto and put a family room above that.

He cut into the end of the home enlarging the window to make a doorway and stairs up to the family room. Back in the early 90's this apparently was no problem. Now in 2004 it is a huge problem.

It is hard to get a older home financed at a reasonable rate already. We have been working with the buyer of our home to find him a lender. The problem is that lenders do not want to finance this home because of the addition. They will blame it on Fannie Mae and Freddie Mac guidelines and there are no such things. They will try to blame VA and FHA, there are no guidlines. This is something the lenders made up and it is not written anywhere.

Do alot of research first. Go straight to the government agencies or FM and FM. All have web sites with alot of good information and help.

We are hoping the Mortgage Company we were first with will finance it again. The prospects look good but not the interest rate. The bank tha the bank that kept dragging it out the first time offered him 5.6%, this other company is offering 6 - 7%. I have called lenders that offer up to 14% and think they are doing you a favor.

I hope this letters saves someone the heartache we have gone through.