What Do the New Mortgage Rates Mean When Building Your New Custom Home?

Rates have already inched up slightly by 0.25% in a decision by the Federal Reserve System in December. This is the start of a trend that will gradually continue in the future, as our country’s economy continues to improve. This marks the end of the near-zero borrowing costs that have prevailed in recent years, and it’s good for investors, but not so great for homebuyers. What do these rate increases mean if you plan on purchasing a new home this year? We’ve broken it down in a few examples of what the cost will be to those who wait to buy their homes and rates continue to increase.

The average mortgage rate for a 30-year fixed has been around, or just below 4.0%, which is what we will use in our example. An average mortgage amount of $300,000 at 4.0% will cost the homebuyer $1,432.25 per month for principal and interest. The difference in the monthly payment for 0.25% increase in the rate (to 4.25%) is $43.57 per month, or $522.84 per year. Not a significant difference, but there are a lot of things you can do with $500.00 extra per year. When you add it up over the life of your 30 year loan the total is $15,685.30.

Since the Federal Reserve has promised to continually increase rates, the longer you wait, the higher your monthly payment and cost to borrow money for a home becomes. Because we don’t know for sure when these gradual increases will happen, it’s hard to predict exactly when the right time to buy a home will be. Of course, the sooner you make your decision, the better you will do on your interest rate. For example, the same $300,000 mortgage amount at a 5.0% fixed rate will increase to $1,610.46 per month in principal and interest. That’s a difference of $178.21 per month. Only 1% difference in the rate and you are paying over $2,000 more per year for your mortgage. That could be a nice, modest vacation. Over 30 years that is $60,000 – a lot of nice vacations!

The same mortgage amount at 6.0% interest is now $1,798.65 per month, or $366.40 per month more in Princeton and interest on your payment. That’s $4,396.80 per year. Over the life of a 30-year mortgage that’s a grand total of $131,901! That’s enough money to finance a college education, or even a few years of retirement. It doesn’t sound so bad when you are talking about a quarter-of-a-percent, or even 1-2 percent higher than today’s rates. But when you start to do the math it really adds up over the length of the loan.

Our best recommendation is to seek the advice of your financial professional, talk to your mortgage representative, and do your research before you apply for your mortgage. We know that now is the perfect time to build your new home, before rates continue to inch up. RBA Homes continues to be one of the premier custom modular homebuilders in Monmouth and Ocean Counties, since 1986. We would love the opportunity to provide information to help you make your new home decision. Contact us today for more details on how to start building your new home on your property or ours.

Benefits of Building a Custom Modular Home During Winter

Building a new custom home is something most homebuyers believe should be done during the spring and summer months. As a custom modular homebuilder, we know that there are several benefits to building your home during the winter months. As incredible as this may sound, we have had many homebuyers take advantage of the winter to build their new home and in the process they saved time, money, and were able to move into their new home sooner than they expected. Here are some of the benefits of building a custom modular home in the winter.

Incentives

Many of our modular home manufacturers offer incentives for winter builds. With fewer orders for construction during the winter months the factory is motivated to provide things like free cabinet upgrades, or even cash incentives to build while the weather is cold. Check with us for more information on winter incentives from our manufacturers.

Quality Construction

As always, modular homes are built in a climate-controlled factory, so the winter weather will not affect the quality of your home. Our manufacturer can build right through the winter and your home will be just as perfectly constructed as one built in the summer months. With your lot prepared to receive your home, we can set the modules, weather permitting, as soon as your home is ready.

Time is of the Essence

Building a custom home can take up to a year or even more if you are building on-site. A custom modular home can be built in a factory in about a month from the time your plans are completed and sent to the manufacturer. The whole process can save time when building modular. That means it is possible to be in your new home for summer if you take advantage of a winter build.

Building a new home is not just for spring and summer. With custom modular home construction, you can build your new home any time of the year. If you love the Jersey Shore and are thinking of building a custom home in one of our fabulous shore towns, there’s no better time than now to get started!  RBA Homes specializes in custom modular homes in towns like Spring Lake, Sea Girt, Rumson, Fair Haven and Colts Neck, and in Ocean County towns like Toms River. Contact us today to find out how we can make your new custom home dreams come true!

Residential Elevators for Custom Modular Homes

There are many building features that are unique to custom modular homes, particularly those built around the New Jersey shore.  Some of these features include pilings to support the structure in a sandy environment, wind rated windows and doors, and living spaces above the ground level.  Depending on the design of your custom modular home, you may find that the kitchen and family room areas are on the second level with the master bedroom and bath on the third or even fourth level of the home. This design style is known as reverse living and is very popular in homes built near or on the water. Logistically, this can be challenging for any homeowner when it comes to bringing items into the home, particularly for those upper level areas. For this reason, some of our homeowners are opting to install residential elevators in their custom modular homes.

Residential elevators come in many styles and can easily blend into the design of any type of multi-level home. They also come with a variety of features, some of which may be more important to a homeowner than others.  For example, many residential elevators need a machine room for operation. If space is an issue you could opt for a machine room free design. Some elevators are more energy-efficient and will work better for a homeowner who is environmentally sensitive. Others offer a quiet gearless premium design and style. With many well-known manufacturers offering residential elevators, custom modular homeowners can be sure that quality, style and functionality are not far from reach.

RBA Homes, at the homeowner’s request, can incorporate a residential elevator, or a shaft for a future elevator, in almost any custom modular home. If the homeowner would like the option of adding an elevator in the future, the shaft can be designed as a closet on the first floor, approximately 5’X5’, providing the homeowner with the option of adding an elevator at a later date.

Making day-to-day living more convenient is part of the reason many homeowners choose to add a residential elevator, or the option for one in the future.  It’s a must-have for any family that is challenged by elderly or handicapped family members too.  While convenience is a large part of the reason to consider a residential elevator, adding prestige and resale value to the home can also be a great reason to add one.  

We recommend you speak to your custom modular builder about the different styles, prices and types of elevators while you are in the design phase of your home, as it’s more cost effective to add it to the design before you begin construction. RBA Homes has built many custom modular homes along the New Jersey shore, in Monmouth and Ocean counties.  Several of our homes include optional residential elevators.  For more details on building a custom modular home, available coastal designs, or information on adding a residential elevator, please contact RBA Homes today.

Modular Homes Prove Stronger During Storms

We’ve always known that modular homes are stronger and can withstand Mother Nature’s fury better than an on-site stick built home.  There are studies that have been done by authoritative resources to prove this, and recently, we came across a post from the Answer Man of the Asheville Citizen-Times that provides the answers to the question “Is my modular home safe in a storm?” The article supports the fact that modular homes are stronger, which we’ve known all along!

In the article, the Answer Man describes a Federal Emergency Management Agency (FEMA) study that suggests modular homes are actually stronger than site built homes because of the factory standards and the need to withstand travel and crane lift.  He also sent the question to the Insurance Institute for Business & Home Safety and their spokeswoman explained, “Modular homes are built to the same building codes and subject to the same inspections as ‘site built’ homes built in the area where the home is to be sited. Modular homes are installed on permanent foundations just like site built homes and because they are built in a factory setting they may be subject to higher quality control measures.”

Here are some facts on the strength of the modular homes we build.  Our custom modular homes are engineered to be stronger than the equivalent site-built home.   Our standard specifications include foundations (crawl & basement) with 12X24 steel reinforced concrete footings, 2X6 framing, 2X10 window and door headers, and a double 2X10 perimeter band for the floor. Construction of the modular home takes place in a climate-controlled factory by skilled craftsmen using precise machinery and methods with higher quality control measures.  The modules are engineered and built to withstand the rigors of being trucked to the job site and hoisted into place by crane. 

For all of these reasons, we know that our custom modular homes are built stronger, and more efficiently, which translates to a better chance of less damage or destruction from the storms that can affect the areas where we build.

RBA Homes has specialized in building custom modular homes throughout the central New Jersey area in Monmouth and Ocean Counties since 1986.  We work with several top quality modular home manufacturers in the industry and are members of the Modular Home Builders Association, recently winning their Home of the Month Awardfor July 2015. For more information on custom modular homes, or to review design plans, please contact RBA Homes today.

Reference article by Answer Man of the Asheville Citizen-Times http://www.citizen-times.com/story/news/local/2015/05/19/answer-man-modular-home-safe-storm/27601313/