Financing

[Michelle]

I was recently approved to purchase a $78,000.00 Modular home in Colorado putting 10% down. The broker/loan processor called me today to notify me that I was approved for my loan however, he said that the loan is 30 yrs long. According to my calculations at the end of the loan I will have paid $252,000.00 for a Modular home. Does this sound right? I definately am apprehensive about purchasing a home that will never re-sale, if needed for the value that I am agreeing to pay on a loan. Am I doing the math wrong? Can anyone offer any insight?

[Julie]

Hi Michelle,

Yes your math is probably correct! The reason the total cost is so high is that you would be paying interest on your loan for 30 years. You should ask the loan person about a 20 year loan. Your monthly payments might be a little higher but you would pay less in interest and for a shorter time period.

I am looking at homes in a similar price range and found that a 15 or 20 year loan saves a lot of interest costs, and makes the monthly payments only about $100 or $200 more a month, or maybe less!

Good luck!

Julie

[Randy Eaton]

Hello Michelle,

Welcome to the real world of financing. I would take Julie's advice or go with a 30 year mortgage and pay an extra $100 per month it will have the same results

Randy Eaton