Don't Have Money to Buy a Tiny House Upfront? Learn How You Can Finance A Tiny Home
Written by: Arron J. Staff writer @ Hyggehous.com
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One of the major appeals of buying a tiny house is to avoid paying off a mortgage your entire life.
Tiny houses are usually fairly affordable to purchase upfront. Usually, they only cost around $50,000 or so for a brand new, professionally built one. But what if you don't have that kind of money to pay upfront for a tiny house? Shop Tiny Homes Well, you could build your own and take your time at it, or you could put it on credit, but the other option is to finance a tiny house. Since mortgages are mainly for real estate and tiny houses are mobile, so they don't classify as real estate, they are not able to be mortgaged per se, but they can be financed. One of the best ways is to save up and finance your tiny house yourself, but if you see that as taking longer than you'd like, you could also consider borrowing money from family or a close friend coming up with an agreement that suits everyone. Usually, an interest rate of 8-10% would be fair so that they feel adequately compensated for their loan. You can also look into getting financing from the tiny house manufacturer. More and more tiny house companies are bringing in financing options because it's pretty rare that someone can afford a tiny house in full cash. This way you can break up your payments for the tiny house over a few years depending on the financing program that the manufacturer has in place. Sometimes the manufacturer will also partner with another organization or bank to provide the financing for their tiny houses. You just have to ask the specific companies and find out what exactly they offer.
If the tiny house builder you really want a tiny house from doesn't do financing, you could also look into a Bank Loan.
If you build a tiny house on a foundation instead of on a trailer, you could qualify for a construction loan or mortgage. The other loans you can look into if you're still interested in a tiny house on wheels is either a secured or unsecured loan. Another option is an RV Loan, and some tiny house manufacturers get themselves classified as RV manufacturers so that customers can secure RV loans to assist them in paying for their tiny house. Tumbleweed Tiny Houses is one company in the United States that does this, but ask around in your area to find one that might do this too. There is also a company that provides this type of loan called Rock Solid Funding. They do trailer financing as well as loans for RVs, boats, and motorcycles. These loans will usually have a higher interest rate and taxes, and they'll be for about 7 to 15 years with a monthly payment of around $500 to $1,000 and a downpayment of about 20%. It has also been suggested to approach a credit union for a loan before going with an RV loan and asking for more money than you think you'll need because there are always additional expenses like shipping.
There's also a website called TinyHouseLoans.com that helps people with funding for their tiny house by providing a network of third-party lenders.
The investors often want to help people get into a tiny house because they support the tiny house movement and what it stands for. You can also use credit cards to finance your tiny house, but you have to be very careful when you go this route because interest rates tend to be very high and the charges can stack up really quickly. There's also the option of a Home Depot Project Loan credit card which can give you up to $55,000 in materials and supplies at their store with a fixed 7.99% interest rate. This is great for a loan like this because it's given based on the borrower's credit score and doesn't require collateral. Take some time researching your options more in-depth to come up with the perfect solution for you and your building plans.