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Estimated Installation Cost: NOTE This is a price guide only. Actual costs will vary depending on specific site conditions and by region

The estimated installation cost includes the following*:

  • Setting the home that you selected onto your foundation or building pad (This assumes normal lot conditions and does not include any extra costs to maneuver the home to your building site or any crane rental fees)
  • Installing blocking or piers under the home and levelling the home with shims
  • Anchoring the home to your foundation with tornado and/or hurricane proof anchors
  • Insulating the marriage line and bolting the various sections of your home together at both the floor and roof lines (if there is more than one section)
  • Finishing roof venting and ridge cap shingles
  • Installing siding on the ends with house wrap (if you selected the house wrap option with your home order)
  • Installing soffit and fascia on the ends of the home for the complete exterior finish
  • Estimates to hook up to existing utilities (you will have to add the cost of a new septic, well, electrical service, and also driveway and etc as needed on your site)
  • Estimate to complete the inside trim and finish work

Notes:

Add for concrete If a concrete foundation (slab or crawl space) is required, add an estimate of $10 per Sq Ft of home to this price guide (if you don't have an actual quote)

Add for skirting (Not needed if home is on a crawl space)

Add for A/C if not an option included by your manufacturer

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Typical Investor funded projects

EXAMPLE # 1

 Project Cost                                                                $160,000

    Includes Land (40,000) + Home (90,000) + Home Installation (30.000)

LESS Buyer Down Payment                                           (20,000)

Balance                                                                         140,000

Management fee (10% of balance)                                14,000

Investor capital (70% of balance = 61% LTV)                 98,000

Home Nation capital (30% of balance)                          42,000

Net to Investor at Buyer’s loan closing in

approximately 90 - 120 days

(50% of Management fee)                                             $7,000

 

EXAMPLE #2

Project Cost(See VA loan pre approval here)                267,000

Less Buyer down payment                                             (1,000)

Management fee(@10%)                                               26,000

Investor capital (@70% = 63% LTV)                              187,000

Home Nation capital (@30%)                                         80,000

Net to Investor at loan closing in

approximately 90 - 120 days

(50% of Management fee)                                             $13,350

 

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AFFORDABLE HOUSING INVESTMENT PROSPECTUS

Please email Invest@HomeNation.com to request a prospectus of investment opportunities at Home Nation.  Regrettably, we are only permitted to offer our investments to accredited investors at this time.

You may also be asked to sign a NDA (Non Disclosure Agreement) and an AAI (Affidavit of Accredited Investor Status) form. 

 

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Cost of a Prepaid Loan - Home Nation

Cost of a Prepaid Loan

One group of costs that you will need to come up with at your loan closing is termed “prepaids”. Prepaids are those items that are considered part of the loan’s recurring costs. There are four prepaids that you will find at most closings.

The first is the prepaid interest…

in which you make an interest only payment for the days remaining in the month of closing. Most mortgage payments are due on the first day of the month for the preceding month. The first payment on your new loan will come due on the first of the month following the first full month after closing. For example a loan closing in March will have a first payment on May 1st. That payment made on May 1 covers the interest for the month of April. As part of the prepaids, if the loans closed on the 18th of the month, then the buyer would pay interest for the remaining 13 days in the month.

this interest is going up actually

Most lenders initially estimate the interest that you will pay at closing at betwen 5 and 15 days. Using less than 30 days in the estimate but subsequently closing early in the month can increase the costs you need to close by hundreds of dollars over the initial estimate. I recommend that you use 30 days as the estimate. That way you are certain that the costs will not exceed the initial estimate and give you the knowledge that you have enough money to close.

The next prepaid…

is the homeowner’s insurance. The customer purchasing a house or site condo is required to have sufficient homeowner’s insurance to cover the amount of the mortgage. This can be done either by buying a dollar amount of coverage or with “replacement cost” coverage offered by most insurance companies. In either case the buyer is typically required to provide a paid one year’s homeowner’s insurance policy at the time of closing. Even if you have elected to pay the taxes and insurance yourself, the lender will still require a 1 year insurance policy to make sure that the home is insured against some calamity.

If the loan will include an escrow account for insurance, the lender will collect approximately two months’ worth of insurance premiums and deposit them into the escrow. Since the insurance policy is a one year term and because the first payment on the loan won’t occur for a month or two, the lender will only collect 10 house payments from the buyer before the annual insurance premium is due. The additional 2 payments collected at closing allow the lender to “jump start” the escrow so that there will be sufficient funds available to pay the first year’s insurance when it comes due.

escrow explanation for mobile home

Some lenders feel that the payment of the first year’s premium is not a “lender’s charge” and will omit that from their initial Good Faith Estimate . Personally, I think that this practice is outrageous and misleading. If you need to pay for something pertaining to the closing, that cost should be included in the total estimate even if the payment is made to another party. You don’t want to end up paying several hundred dollars towards an insurance policy and then find yourself short on the remaining costs needed. When comparing estimates between lenders be sure that this has been included on all the estimates but remember that the actual amount you pay will be determined by you and your insurance company – not the lender.

The next prepaid is…

for property taxes and includes payments to the seller and the lender. In some areas of the Midwest the property taxes are paid in advance, however in most of the country they are paid in arrears. When the buyer closes on a house they reimburse the seller any taxes that have been paid in advance. This is called the “proration” of taxes and is calculated on a per day basis.

When the buyer has an escrow account for taxes they need to deposit enough money to pay the respective bills when they come due. Much like the escrow for insurance, the lender will calculate the number of monthly payments that they will receive before a tax payment is due and collect the difference.

For example, if you will make 5 payments before a particular tax bill is due the lender will collect 7 months’ worth of taxes for the escrow. This will insure that the lender has enough collected to make the annual payment. The federal government regulates how much money lenders are allowed to hold in escrow. This is called the aggregate analysis and is discussed in another area of this website. Normally the buyer will need between 10 and 13 months taxes at closing to cover both the prorations and escrow.

I prefer to estimate the costs at 13 months so that there is a cushion in the initial estimate of charges. When comparing initial estimates be sure to see if the lenders are using the same number of months for taxes or the bottom lines could be dramatically different and you could be misled into thinking that a particular lender’s costs are less when in fact they are not.

The last prepaid

…involves those loans where there is some type of mortgage insurance. On certain types of mortgage insurance the premiums are paid much like the homeowner’s insurance. Subsequently, the lender may need to collect two months’ worth of mortgage insurance premiums from the buyer to make sure that there are adequate funds to pay the premium when it comes due. Their are too many options for PMI to go into a full detail of them here.

By law every customer that applies for a mortgage must be given a Good Faith Estimate. This estimate is designed to show all of the costs that the borrower will incur to get a mortgage. There is a great deal of latitude that a lender can exercise in these Good Faith Estimates. I have seen estimates for the same mortgage where the bottom line has varied by hundreds of dollars due to different ways of estimating. Be sure that you understand the estimate before committing to a particular lender.

Since often comparing companies and quotes can be a daunting task, as a service to my clients, I help decipher the differences in Good Faith Estimates. If a detailed analysis shows that my costs represent the best then I help the person get their loan, if I am not the best available, then I’ll share that with the customer and they are free to pursue the loan through another lender.

An estimate where the loan officer has underestimated the costs may be a good predictor whether that loan officer can be trusted in the rest of what they say. Remember that according to federal regulations you cannot be made to pay costs that have not been disclosed to you prior to the closing. However, the costs must be those charged by the lender. Therefore if the lender fails to disclose insurance, taxes or other charges associated to other parties, they are able to charge those after all.

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