Here at Tiny SMART House, we want to make your dream of owning a custom tiny house a reality. One of the main aspects we talk to our clients about surrounds the idea of financing. Have you thought of how you will pay for your dream home? Let’s take a look at some solutions.
Your financial picture
Before you look for financing options, know what you can afford. Here are some questions for you to consider:
- What is your ideal budget for your dream tiny home? (Besides the associated cost of building one, keep in mind other costs involved, such as: where you will be parking it, possible site preparation, etc.)
- How much available cash do you have for this project?
- What is your payment comfort zone? In other words, do you have a current monthly budget? If so, do you have room for another monthly payment?
- Do you know your credit score? (This is a key number lending companies need)
- Do you currently own a house and/or property?
Know your options
Traditional mortgage lenders have minimum loan amounts and tend to want homes they know already have value. Even for construction loans, they require the ability to know “comps” (comparable home values based on similar houses and properties in the area where a foundation house will be located). While it is possible to find a lender who will work with you, it can be tricky.
If you already own a home, you could consider a home equity loan or a home equity line of credit (also referred to as a HELOC). Check with your bank for terms and rates. If you are going to place a tiny home on your property, make sure you have checked with your local building department on zoning regulations. You can check with the American Tiny House Association (ATHA) for more information. Nathan (TSH CEO) is the ATHA Oregon Chapter Lead. If you need help with presenting to your local planning board, he is available to hire as your consultant on all aspects.
RV loans can also be an option. Tiny SMART House is RVIA certified so once your tiny house on wheels is built, it will receive a VIN and license plate as an RV. However, several banks who offer RV loans may have an issue with it being a primary residence and/or with financing a RV not yet constructed. Our suggestion is to apply for a bridge loan through Enhancify, and after your custom tiny house RV is built, to refinance using a lower RV loan with longer payment terms.
Many of our clients choose to use personal loans, which may happen in several different ways. One is getting money from family or friends. (You know to use caution, we do not advocate developing unhappy relationships in your quest for your tiny house dream). If you are/were in the military, check in with banks that have special loans targeting your needs. Another option is to finance a personal loan. These unsecured loans are generally based on your credit score and income/debt ratio. They do not require collateral or down payments. Generally, they have shorter terms and higher interest rates than the other types of loans mentioned above.
How can we help you?
Here at Tiny SMART House we can help you create an estimate for your custom tiny house. We can start with a rough estimate based on our design checklist (contact us for a consultation). When you have decided that we are the perfect fit for creating your dream tiny house, you will begin the design process by completing an itemized checklist with every detail priced out. This checklist will give you an estimated build total based on your design selections for your custom tiny house. Note: final costs do depend on specific material costs at time of construction – we cannot control things like the cost of steel or vendors increasing their pricing.
Tiny SMART House focuses on being a quality builder, not a money lender. Instead, we have researched various companies and have partnered with a few companies that may help you finance your tiny house!
Enhancify is one that works with contractors like us to help our clients find competitive home financing options. You may be qualified to get a loan with fixed monthly payments in your comfort zone. Check out what loans you could qualify for by filling out the form below. All information is confidential and stays within Enhancify’s secure system.
