A tiny house with large glass windows, sits in the backyard surrounded by a wooden fence and trees.
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These days, not everyone dreams of buying the standard single-family home. Instead, some are embracing the freedom of going tiny. If you’re one of the many people interested in moving into a tiny house, read on below. I’ve outlined three considerations that you should think about before taking the leap.
Where are you getting your financing?
Though leading a low-cost lifestyle is one of the main draws to tiny house house, you’ll likely still need money to get the process started. Unfortunately, unlike more traditional homes, tiny houses can’t often be mortgaged. Mortgage companies usually require homes to be built on permanent foundations and/or have minimum loan amounts.
For those reasons, you may need to look into alternative financing options. These could include:
RV loans: Tiny homes built on wheels may qualify for RV loan. RV loans typically have lower interest rates than other types of financing and loan terms up to 15 years. However, your home must be built in accordance with the regulations set by the Recreational Vehicle Industry Association.
Personal loans: Personal loans don’t require collateral, which can make them an attractive financing option. However, these loans also come with shorter loan terms – usually 2-7 years – and higher interest rates than other types of financing.
Where will you put your tiny house?
One of the major considerations that you’ll have to keep in mind when moving into a tiny house is where you’ll put it. Ultimately, there are a few options including buying your own plot of land, parking on a friend or relative’s property, or traveling with it.
If you buy your own plot of land, it will cost will obviously be the main factor. You’ll have to figure out how to finance it in addition to your buying and building costs. You’ll also have to contend with ongoing fees like property taxes.
If you travel, you’ll need to make sure you have a vehicle big enough to haul it. You’ll also need to buy trailer license plates and pay for an annual RV registration.
Will you buy or build?
The next thing you need to consider is whether you will buy or build your tiny house. On the one hand, building your tiny house can give you the opportunity to customize your tiny house to your individual specifications while also cutting down on labor costs. On the other, if you’re not the most handy, buying your tiny house can make things much simpler.