You’re interested in buying a manufactured home but as a buyer, you want to know exactly what you qualify for.
How much down do I need?
If the home was built on or before June 13, 1976, you will need 20% down and the loan term will be 15 years. If the home was built after 1976, minimum down payments start at 5 to 10 percent down with a loan term between 20 and 23 years. This example will help you calculate your down payment, loan amount, and estimated monthly payments.
As an example, you find a home for $80,000 and it was built in 2002.
Sales Price: $80,000
Down Payment %: 10%
Now we will calculate the down payment: take the sales price and multiply that by the down payment percentage in this sample that’s $8,000 down.
$80,000 x 10% = $8,000 as the down payment amount
Now subtract the down payment from your initial sales price and that will equal the total loan amount you’ll apply for with Santiago Financial.
$80,000 – $8,000 = $72,000 as the total loan amount
To calculate your estimated monthly payment, multiply the Total Loan Amount by 1%. In this case, it’s $720 a month. This is a rough estimate and that includes taxes and insurance.
$72,000 x 0.01 = $720
Let’s say your space rent is $800. Add your monthly space rent, your estimated monthly payment, and your total housing which would come out to about $1,520 per month.
$800 + $720 = $1,520 in Total Monthly Housing Costs
You need to make at least 2.5 to 3 times the housing expense to qualify.
$1,520 ÷ 35% = $4,342.86 as the Approximate Gross Income Needed
To calculate your total debt ratio, add your monthly payments for any car loans, credit card payments, other debts etc. Let’s say they total $400 for this scenario.
($1,520 + $400) ÷ 45% = $4,266.67 as the Approximate Gross Income Needed
So now we have your estimated income range needed to qualify for this example.
Estimated income range $4,342.86 – $4,266.67
Important Tips if your income is not within the estimated income range:
● Make sure you used gross income, not net income
● Look into paying off outgoing obligations
● Find a park with a lower space rent
● Increase down payment amount
● Add a co-applicant if they are to live in the home with you
The next step is to call Santiago Financial to complete your credit application and begin your approval process.