tinyHome

Financing a Tiny Home

By: Jorge Lopez, April 11, 2016

There is an old adage that says “bigger is better” when it comes to real estate, yet the tides have been shifting towards smaller houses that are only a few hundred square feet in size.  These homes provide a much lower cost and are a great option for young workers that are just getting their feet wet or retirees looking to reduce costs as they live out their golden years.

Despite its lower costs, financing a tiny home does require a large degree of responsibility, beginning with applying for and being approved for a loan.  It’s also imperative to set a realistic budget and steadfastly stick to it.  With the tiny home it’s easy to go overboard adding things here and there.

Keep in mind that if you’re taking the do it yourself approach and building your tiny home, financing may be tougher to come by, so you may wish to consider a professional builder instead.  The reason why is due to uncertainty.  A financial institution knows that a professional builder will construct the home exactly as it should be versus the risks involved with an amateur potentially making fundamental mistakes.

Also be aware that in some cases a financial institution may not even consider a tiny home to be a “real” home, especially if said home happens to be portable.  Shop around to see where you can find an  appropriate mortgage and make sure to ask all of the pertinent questions like what the rates are, any fees that are charged, the length of time the approval takes, and if an appraisal is required.

This real estate and financial update is brought to you by FreeValues.com, the number one provider of free home values on the web.  We provide free house values as well as useful information for sellers.