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Tiny houses begin to take off with new mortgage options


Not all tiny houses are “real estate.” If it’s on wheels it’s personal ... Now, however, things are changing. In New Hampshire, for example, you can have an "accessory dwelling unit" on a property. It can’t be more than 750 sq.


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Posted 02/07/2018 by Peter Miller Peter GMiller, author of The Common Sense Mortgage, is a real estate writer syndicated in more than 125 newspapers nationwidePeter has been featured on Oprah, the Today Show, Money Magazine, CNN and moreFollow Peter on Twitter Share This Page .resp-sharing-button__link, .resp-sharing-button__icon { display: inline-block } .resp-sharing-button__link { text-decoration: none !important; color: #fff !important; margin: 0.5em } .resp-sharing-button { border-radius: 5px; transition: 25ms ease-out; padding: 0.5em 0.75em; font-family: Helvetica Neue,Helvetica,Arial,sans-serif } .resp-sharing-button__icon svg { width: 1em; height: 1em; position: relative; bottom: -1px; margin-right: 7px; } .resp-sharing-button span { padding-left: 0.4em } /* Non solid icons get a stroke */ .resp-sharing-button__icon { stroke: #fff; fill: none } /* Solid icons get a fill */ .resp-sharing-button__icon--solid, .resp-sharing-button__icon--solidcircle { fill: #fff; stroke: none } .resp-sharing-button--twitter { background-color: #55acee } .resp-sharing-button--twitter:hover { background-color: #2795e9 } .resp-sharing-button--pinterest { background-color: #bd081c } .resp-sharing-button--pinterest:hover { background-color: #8c0615 } .resp-sharing-button--facebook { background-color: #3b5998 } .resp-sharing-button--facebook:hover { background-color: #2d4373 } .resp-sharing-button--tumblr { background-color: #35465C } .resp-sharing-button--tumblr:hover { background-color: #222d3c } .resp-sharing-button--reddit { background-color: #5f99cf } .resp-sharing-button--reddit:hover { background-color: #3a80c1 } .resp-sharing-button--google { background-color: #dd4b39 } .resp-sharing-button--google:hover { background-color: #c23321 } .resp-sharing-button--linkedin { background-color: #0077b5 } .resp-sharing-button--linkedin:hover { background-color: #046293 } .resp-sharing-button--email { background-color: #777 } .resp-sharing-button--email:hover { background-color: #5e5e5e } .resp-sharing-button--xing { background-color: #1a7576 } .resp-sharing-button--xing:hover { background-color: #114c4c } .resp-sharing-button--whatsapp { background-color: #25D366 } .resp-sharing-button--whatsapp:hover { background-color: #1da851 } .resp-sharing-button--facebook { background-color: #3b5998; border-color: #3b5998; } .resp-sharing-button--facebook:hover, .resp-sharing-button--facebook:active { background-color: #2d4373; border-color: #2d4373; } .resp-sharing-button--twitter { background-color: #55acee; border-color: #55acee; } .resp-sharing-button--twitter:hover, .resp-sharing-button--twitter:active { background-color: #2795e9; border-color: #2795e9; } .resp-sharing-button--google { background-color: #dd4b39; border-color: #dd4b39; } .resp-sharing-button--google:hover, .resp-sharing-button--google:active { background-color: #c23321; border-color: #c23321; } .resp-sharing-button--linkedin { background-color: #0077b5; border-color: #0077b5; } .resp-sharing-button--linkedin:hover, .resp-sharing-button--linkedin:active { background-color: #046293; border-color: #046293; } .resp-sharing-button--reddit { background-color: #5f99cf; border-color: #5f99cf; } .resp-sharing-button--reddit:hover, .resp-sharing-button--reddit:active { background-color: #3a80c1; border-color: #3a80c1; } Facebook Twitter Google+ LinkedIn Reddit As Seen On Tiny houses begin to take off with new mortgage options Peter Miller The Mortgage Reports Contributor Tiny houses make sense for many At first, tiny houses were an oddity, but now they’re increasingly gaining acceptanceStarting this year, there will be a tiny house section in the International Residential Code (IRC)This means it will be much easier to get approval to build such homes – and therefore much easier to get financing. [cta] But mortgage lenders not necessarily on the bandwagon Lenders, being cautious, have not been thrilled with the tiny house movementThey see several problems. In many areas, there is a minimum home sizeHouses which are “too small” are not allowedZoning laws often prohibit houses which do not meet a certain size requirement. Not all tiny houses are “real estate.” If it’s on wheels it’s personal propertyThere’s a difference between financing real estate and personal property such as a mobile home. Tiny houses generally mean small mortgagesSince lenders have built-in fixed costs small mortgages are often unattractive to them – and costly to borrowers. Now, however, things are changing. Mortgages for tiny homes, log homes, green homes and other unique properties In New Hampshire, for example, you can have an "accessory dwelling unit" on a propertyIt can’t be more than 750 sqft., but that’s enough for a residential unit with a bathroom and kitchen – and much bigger than a lot of tiny housesBecause this is a state-wide measure it has precedence over local rulesIn addition, efforts are underway in a number of states to enact legislation broadly allowing tiny houses. Whether you want to live in someone’s backyard, or off the grid, there is the matter of financing. How can you get a mortgage to pay for tiny houses? Source: Tiny House Statistics Tiny houses and mortgage options We often value homes on the basis of dollars per square footWith tiny houses, there are often high costs per square feet because there are relatively few square feet and a disproportionate amount of space is devoted to costly areas such as kitchens and bathroomsHowever, because tiny houses are small there are few square feet so the total cost can be well below the price of a traditional home. Also, it depends how a small house is builtAre you the builder or will the home be constructed by professionals? Is there a cost for ground or are you building on land you already own, say a backyard? Whatever the case, speak with a local attorney or architect to make sure you can get all required permits and permissions. If you now own a home and have equity then look into a second mortgage or a home equity line of credit (HELOC)This means your tiny house will be mortgage-free but you will have more debt on your existing house. Factors that drive your mortgage rate: property type and use In some cases, an FHA Title 1 loan can workYou can borrow as much as $25,000 for a manufactured home that qualifies as real propertyA single-family house can get financing with a 20-year term. The purpose of a Title I loan is to pay for alterations, repairs and site improvementsIt cannot be used for acquisition financing – HUD says the “structure must have been completed and occupied for 90 days” before it can qualify for Title 1 financingIn other words, if you have an existing home and want to build a “granny pod” in the backyard you may be able to get help with the Title 1 program. The $100,000 tiny mortgage As tiny houses grow,  their costs also increaseIt’s entirely possible to have a tiny house with land and a foundation as well as a $100,000-plus price tagFor example, a 750 sqfthouse priced at $134 a square foot means the cost is $100,500In this situation, owners may want to look at FHA financing, a VA mortgage or conventional (non-government) loan. Are there any special problems when financing tiny houses? How your loan size affects your mortgage rate: and what to do about it All real estate must meet certain standards to get a mortgageThe property must be seen as “real estate” with a recorded title and platIf there are no property taxes it’s not real estateIt must meet zoning requirements and it must be built to building code standards – thus the importance of the IRC recognition. If you’re buying a manufactured home then the builder or developer might provide financingBut, as always, shop around for mortgage rates and terms. What are today's mortgage rates? Current mortgage rates, even for tiny houses, are still invitingWhile the overall trend is higher, rates still bump around within a narrow range, and if you stay in contact with your lender, you should be able to grab a lock when rates temporarily drop. Verify your new rate (Feb 8th, 2018)   Peter Miller The Mortgage Reports Contributor Peter GMiller, author of The Common Sense Mortgage, is a real estate writer syndicated in more than 125 newspapers nationwidePeter has been featured on Oprah, the Today Show, Money Magazine, CNN and moreFollow Peter on Twitter The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full BeakerThe views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates. Try the Mortgage Calculator Resources Get Today's Rates Mortgage Calculator View Loan Limits SIGN UP Stay informed on the mortgage news that interests you. Related Articles What is a mortgage refinance, in plain English FHA Loan With 3.5% Down vs Conventional 97 With 3% Down Why You Should Shop Around When You Refinance How to cancel FHA MIP or conventional PMI mortgage insurance How To Buy A House with No Money Down in 2018 How Much Home Can You Afford? How To Use Your Mortgage "Cash-Out" Refinance First Time Home Buyer's Guide FHA Streamline Refinance Chart, Guidelines, Rates, & Refunds Private Mortgage Insurance (PMI) Is Neither "Good" Nor "Bad" Home refinance: When should you consider it? 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Mohammed YRetired The Mortgage Reports is informative and I read it dailyI am grateful for the knowledge I have gained. 2018 Conforming, FHA, & VA Loan Limits Mortgage loan limits for every U.Scounty, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA) Quick Links Mortgage Rates Today FHA Refinance VA Mortgage Rates HARP Loans USDA Home Loans First-Time Home Buyers Guide The Ultimate Guide to VA Loans and VA Benefits Mortgage News in Spanish Join Our Lender Network! Who We Are About Us Contact Us We are on Facebook We are on Google+ We are on LinkedIn We are on Twitter Consumer Mortgage Tools 2017 Mortgage Loan Limits Get An Instant Rate Quote Mortgage Calculator Widget Mortgage Payment Calculator

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