How to Finance a Tiny Home
When you want to buy a tiny house, money is going to play a big part. Your chances of getting financed will improve significantly if you are able to make a down-payment of at least twenty percent. One thing that you should always remember is that tiny homes do not qualify for mortgages. If owning a small home is your ultimate dream, there are several loans that you could make use of.
A recreational vehicle loan is a good place for you to start. Most of the tiny homes are on wheels meaning that they can be financed easily as recreational vehicles or trailers. It is common for most banks to lend not more than a hundred thousand dollars using factors such as your credit score, debt to income ratio and your work history to set the interest rates. Your primary bank should always be your first option as you can use your record with them to offset some of the shortcomings that may be present in your credit score.
Explore the possibility of getting an unsecured loan. Your bank, online lenders credit card unions and peer to peer lenders can all offer you an unsecured loan. Unlike recreational vehicle loans, personal or unsecured loans are more stringent since they are not backed by any security if a borrower defaults. Some peer to peer lending sites can offer up to a hundred thousand dollars. With a good credit score, there are chances that you could get a low-interest loan. Some providers also have no home equity requirements, no fees, and much easier loan processes.
Consider getting a home equity loan. This is considered to be the easiest way to finance a small home. In most cases, lenders will have programs that can loan you a percentage of the equity in your home. If you are a homeowner, this is going to be a very good option for you.
Determine your qualifications for tiny home financing. Lenders use different factors to establish if they are going to find a loan or not. In this article, you can learn more about the criteria lenders use or establish whether or not you are well qualified for a loan. Although it is possible to get financed even if you do not meet all the requirements, it is even easier to get better terms on your loan if you satisfy more requirements. Make sure you can make a down-payment of about fifteen to twenty percent. Your credit history should also be between three to five years.