Tiny Homes

A lot of millennials are buying smaller homes, particularly tiny homes. They aren’t interested in maintaining a larger home and maybe one day selling it for a chunk of change. Owning a large home with a lot an old American dream, something today’s generations are forgetting about.

There are TV shows about it on HGTV’s network, called “Tiny House Nation” and the DIY network shows tiny homes every-now-and-then.

What these networks don’t show is the process of obtaining a loan for such a small home. A lot of these tiny homes don’t even qualify for the mortgage requirements for a traditional house. One option for tiny home hunters is to build their own tiny home. The options to financing your tiny home are here below.

Home on wheels

These types of homes usually fall under loans that are made for RV’s, which are unsecured, fixed-rate mortgages. The payoff for these is usually around 2-7 years. What is nice about these is they don’t have any application fees, or closing costs.

These loans are a straight up swap of money based on your FICO score. The catch to these is that the loan usually is attached with a higher interest rate, and they are NOT tax deductible.

Specific mortgage lenders

Because this lifestyle is still so new, the market is quite small. The traditional mortgage lenders often don’t want to bother with such small loans. It’s not uncommon for lenders to have a minimum loan amount around $100,000. So if you are dead-set on a small home, you’ll need to find a lender that offers these types of loans.

Consider the zoning laws

When anyone buys land they must consider what they are restricted to building on their land. Every tier of, local, county, and state zoning laws must be carefully reviewed. Zoning laws include the minimum size of your lot, square footage of the house, and sometimes even how many residents may live on the property.

Good thing there is such a group called The American Tiny House Association; they’ve got all the info you need to know for state-by-state regulations.

Know all the costs

It’s vitally important for you to know your budget when deciding to get an RV loan. If you happen to get an RV loan to build your tiny home, you’ll have a ton of freedom in regards to how you spend your money.

When you buy your land and begin construction, the rest of your money is allowed to go towards furniture, landscaping, etc.

Just like any home you will also need to consider the maintenance costs. Something almost always needs to be fixed or repaired. A perfect example is that a ton of tiny homes needs to be repainted, or re-stained every couple years.

  What’s your time frame?

The way you choose your financing will depend on your life plans. If you plan on staying for a little while, you might want to just save a tad longer and buy a tiny home in cash. If you are in a little hurry it’s not impossible to get an RV loan and begin building shortly after. 

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