GREAT! I love modifying stuff. I think though that they shouldnt have a HUGE effect. You have it so that the 1st level mods are near useless, and the 3rd level mods are godlike. The problem with that, even if it IS really expensive is once you get it you have it, then it just makes everything OP. I think a smaller level of variation on each level, and/or these mods requiring something more than a bullet to fire. Maybe w/o mod, 1 bullet. lvl 1 fire mod, 1 bullet, 2 napalm. lvl 2, 5 napalm and so on.
To really balance out levels, I feel that it should be made that 1st lvl has higher dps output, but less effect (for fire mod, this would be less burning chance, but increase extra fire damage per bullet). However having 2 or 3 mods makes the inital DPS lower, but multiple effects, or similar effects (2 fire mods) increase. As for the tier of each mod (common mods vs Legendary mods) there has to be some form of progression. sure, the higher tier mods will have some negative effect to them (higher ammo consumption, No mixed elements, ect) to prevent them from being OP. however if it was Too balanced in which mods don't have too much of a effect, then it feels pointless to put a mod in. IMO, if the ammo consumption for my fire pistol was 2x higher AND i needed bullets + Napalm, only for a 15% (throwing out a number) increase damage, I probably wont use it. I would need more information on enemy HP stats, gun damages, types of guns, player HP, and other mechanics of the game to really determine whats balanced and whats OP.