In recent years, the tiny house container has become extremely popular as it’s affordable and functional, making it a great alternative to traditional housing. However, although container homes are an economical choice, it is not easy to finance such a structure, which means it’s difficult to get a home loan for a container home. This is because many banks are not on board with alternative housing structures. However, things are changing, and getting a loan for the container house is fairly easy. Read on to learn more:
Preparations to get a loan for tiny house containers
Get a comprehensive plan: When you are attempting to finance the container home, you need to have a detailed plan laid out. This will help a lot with the loan officer and enable you in getting the loan you need for the container home financing. A detailed plan needs to have all the probable costs for materials and labor. This will define the home’s potential valuation, which can help when you offer collateral for it. However, you and the builder should work accordingly and develop a moderately precise cost projection; based on that, the loan amount will be decided, and you can kickstart the project.
Understanding the building codes: Almost every county, city, town, and municipality have a set of building codes that are different from one another. To get a loan, you need to understand the local building codes, as the lending institutions will surely want that you are fully aware of the regulations and ensure that you abide by them. At the county assessor’s office, you can get to know out more about the local building codes, and they will let you know if container house structures are allowed. Not all counties are open to tiny house container structures, and some have specific requirements. Learning about these is helpful before you attempt to get funding for the structure.
Speak to your builder and other container homeowners: Many builders offer financing solutions, so connect with them before you start searching for a lender. At TinyHouseMe, we connect you with innumerable tiny home builders, and you can easily find a trusted container home builder among them. In addition, many home builders offer flexible financing solutions that would be tailored for your convenience. However, if you want further help, the next step would be to talk to tiny home dwellers who have managed successfully to finance a loan for the tiny house container. This will aid you find banks willing to give you the loan, and you will avoid making mistakes by getting first-hand guidance. At TinyHouseMe, we provide helpful resources for financing your tiny home project. Sign up to know more!
Buy land first: Before you look for financing, get the piece of land ready. This shows your commitment towards the projects, and banks would be easier to convince for the loan. However, getting a loan for the land is also necessary, which again has a different procedure. You should not go for the same lending institution for land and tiny house container loans.
Ways to get a loan for the container home
Land and construction loan: Lenders offer you a loan for purchasing land and also constructing the container home. Not all lenders offer both these loans, and if the land is not cleared for a home or doesn’t have a permit, then you will need to pay for setting up the property.
Construction loan: If you already have land, you will qualify for a construction loan to get finance for the materials, labor, and the actual building of the home. Once you are through with the construction, you will have to pay back. Usually, people borrow another loan for paying back the construction loan.
Construction-to-permanent loan: Here, you get the loan for the construction, and when it’s through, the loan is converted into a permanent mortgage. If you prefer to buy a well-built container home that only needs to be transferred to your land, it gets financed as a manufactured home. This is a great thing, as you get plenty of financing options depending on the size of the structure and how permanent the home is. Professional advice from a lender or builder can help, so signing up at TinyHouseMe is highly recommended.
Conventional home loan: You can opt for a conventional home loan for the project, but this option is ideal only if the structure is an existing property (meaning one that’s already built and has been installed over a piece of land) or else you are buying a finished model after someone has made the upfront costs.
Conventional loans are very popular as they are widely available, and low-down payment options make them all the more attractive.
As per mortgage reports, to qualify for a conventional loan, you need the following:
- 3% down payment if you are a first-time buyer
- A credit score of 620 or even higher
- 5% down if you are a repeat home buyer
However, since container homes are considered modular houses, there are strict lending guidelines, and you will get the funds released only after key milestones are reached.
Conclusion
When you are looking for a tiny house container, then preparation is the key. Find builders who offer financing solutions, and you can connect with trusted ones via TinyHouseMe. We ensure you get a faster response and help you book an appointment with a builder of your choice at the earliest.
