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Modular vs. Manufactured (Trailer)Why should I pay more for a modular home?The price of the modular home compared to a doublewide is more because you are adding almost twice the amount of wood, better plumbing, thicker electrical wiring and so much more. When you add those things to the home, the interest rate for the loan is much less. The insurance is much less and your utility bills are much less. In the end, you pay less per month to buy the modular and the home is going up in value instead of going down. The home has fewer maintenance and repair issues and there isn’t a need to purchase another home 15 years down the road because of service issues. A modular home really is the most affordable option. We have the largest modular selection in the state and we can help you design your home to fit any budget.The modular homes are built to International Residental Codes, same codes as site built and a trailer is built to HUD. There are many different ways to build the doublewide trailers. There are the cheaper ones with the wallpapered walls with strips every 4 feet and then there are the better built ones with sheetrock walls with ac vents in the ceilings. The better built ones make less sense to purchase than the cheaper built ones because you are spending even more for a product that will depreciate.What is the average cost difference between a modular home and a manufactured trailer?The average difference would be that you would need to add about $20,000 worth of wood, wiring and better plumbing to turn the average trailer into a modular home.If you can't afford the modular, you definitely can't afford the better doublewide trailer because they are more expensive in the long run. Here’s why…If you have the option to purchase one of two buildings, and you call the bank and say ”I am interested in purchasing a home. If one home is $20,000 more than the other home (The amount to upgrade the trailer to a modular home), at a 4% interest rate, how will that affect my payment?” Well, at a 4% interest rate, every $1000.00 that you go up or down means your payment goes up or down $4.77. OK, so $4.77 x 20,000 equals a $95.40 payment change to add all the materials to make it a house.Then you say to the Banker, “No, I think I will stick with the trailer.”The Banker says, "trailer"??? “We can't give you 4% on a trailer!”I have clients saying that the best rate they were quoted on the trailer is a 5% interest rate. At that rate, it would eliminate the $95.00 payment difference because of the increase in interest. Best case scenario, the rate would be .25% higher on the trailer and that would be a $15.00 increase on the payment.So the difference is now $80.00 a month. Then you will have to purchase insurance on whatever home you choose. I have quotes comparing a $100,000 trailer with a $130,000 modular home for Homeowners insurance. It was $1000 a year more to insure the trailer. Divide that by 12 months, it’s $83.00 a month more for the insurance.So now you are spending $3.00 MORE per month if you have chosen to purchase the trailer.Can you now see how at $20,000 difference, it wouldn't make sense to purchase the trailer?OK, that isn't the end of the equation. You still need to heat and cool this building you have purchased. As a modular, here are just a few of the changes that will be made compared to the trailer: Felt under the shingles, which is not put on the roof of a trailer.Eliminating the 2"x 2" roof rafters and replacing them with 2x4s or 2x6s.TYVEK wrap instead of nailing the vinyl or hardi plank directly over the wood wall backer.2x6 exterior walls instead of 2x4. R30 Ceiling, R19 Wall, R13 Floor insulation instead of R22, R11, R11. 2x8 floor joist instead of 2x6. Double top plate to the exterior walls instead of single top plate. Headers over windows and doors, trailers have no headers over windows and doors. Thicker wiring which is 12 gage to all rooms instead of 14 gage. The lower the number, the thicker the wire. Higher quality plumbing materials required by the International Residential Code 20 amp fuses instead of 15. Larger steel exterior doors with storm doors front and back compared to smaller doors found on trailers and so, much more. So what will the utility cost difference be for the modular?$30.00 to $40.00 a month less?So now you are paying $33.00 more a month to live in a building built with $20,000 less wood wiring and plumbing.-1981209411290What does it mean to depreciate?The best way to illustrate the horrors of DEPRECIATION is to consider a day off from work, taking a trip to your local bank. When you arrive request a $20,000 loan and request that they spread the payments over 30 years. Now look at the payment schedule and discover that by the time you pay back the loan you will have added $12,000 of interest for a total of $32,000. Request that the loan officer give you the $20,000 in cash, hundred dollar bills.Walk out into the parking lot and hold it in your hand. Look at it, feel it, now take out a cigarette lighter and hold the end to the hand full of cash and spark it. Get the fire going and look at the ashes, that is DEPRECIATION.So, there is never, never a good reason to buy a manufactured trailer instead of a Franklin modular home. Franklin ................
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