Why lenders sweat the small stuff with tiny houses

Rising house prices have led some home buyers to seek alternative ways to get a foot on the ladder.

One popular option is to embrace simple living in smaller houses. Known as the tiny house movement, this type of abode is faster and easier to build and low maintenance once completed.

However, it can be difficult to obtain finance because many tiny homes are transportable. Here’s what you need to know.

Fixed vs transportable tiny houses

Tiny houses are more commonly fixed on a trailer to make transportation easier but they can also be built on foundations.

Note that lenders can only provide finance if the house is permanently fixed to the ground so this can create some issues for tiny house hopefuls.

What are your options?

If you’re looking to buy a transportable tiny house and intend to place it on an empty lot, one option is to buy the land and dwelling using separate loans.

For example, the land could be purchased using a traditional lender, and a personal loan can be used to help purchase the tiny house.

This means managing two types of loans so you need to understand the costs, risks and time frame to repay. You may also need to be budget conscious as the amount you can borrow using a personal loan is also limited.

How can an adviser help?

Owning a tiny house can be achievable – you just need the right help. Advisers can help package the finance together in a way that best suits you. Where specialist services are required, such as insurance, they may also be able to point you in the right direction.

Reach out to your nearest Mike Pero Mortgage Adviser today.