Living in tiny houses on wheels can be exciting! You can move from one place to another and stay in a place you like. You can also have a house that just fits your purpose. The tiny house is easy to clean and maintain. However, one of the biggest challenges of a tiny house on wheels is that you cannot get the conventional loans for it, like mortgage from a bank. The cost of building a tiny house on wheels is lower than that of a normal house. So, financial institutions don’t approve of a mortgage as they won’t be able to earn enough profit from it. Even if they could earn, they have to charge a very high interest rate. This will discourage the buyers from taking a loan. Having said all these, it doesn’t mean that you are left with no choices. You can take the following types of loans for building your tiny house on wheels.
Home Equity Loan
If you are building this home as a vacation home or second home, then you can go for this option. You can keep your first home as security to take this loan. However, if you don’t own a home then you won’t be eligible for this loan.
There are some banks that provide unsecured personal loans to the consumers. In this case, you don’t need any security or collateral. But you will be charged a higher interest rate. Depending on your income, credit history, and job history, you will be approved for an unsecured loan.
If you don’t own a home already, then getting home equity loan will be impossible. So, you can take RV loan instead. First, the local associations will verify your home as RV. Then they will approve you the loan.
All these forms of loans are harder to obtain than the mortgage you get for your normal home. But these loan options give prospective buyers the opportunity to buy a tiny house on wheels.