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Tiny Homes in the News – Are They Really a Way to Beat a Mortgage?

By Al Twitty | May 3, 2016

In recent news there has been a huge movement towards downsizing, largely due to an uncertain economy. Prospective homeowners are leery of getting in over their heads with a mortgage on a home because the financial news is up one day and down the next. In an effort to make the best of the situation, many people are looking into Tiny Homes as the affordable solution. However, are they really a way to beat a mortgage? There are some aspects of owning a Tiny Home that just might not be as cost effective as you are led to believe.

Get the Facts First
Once you know the facts, you can make an educated decision, but before jumping from the frying pan into the fire, you just might want to consult with a mortgage lender to see if there are conventional mortgages that you can afford. It is true that the actual cost of buying a Tiny Home is quite small, just as the home is quite small. Unfortunately, a Tiny Home doesn’t float on air. It needs to be placed somewhere and this is where the real cost of owning one is going to make a big dent in your wallet. Get the facts first before ordering a customized prefabricated home that is not quite an RV, not quite a trailer and certainly not quite a home.

Tini home

Where Can You Put a Tiny Home?
Until quite recently, consumers were buying Tiny Homes and having them delivered to mobile home or RV parks. This is where the news is not good at the moment. HUD is moving in to take steps to ban this type of dwelling from mobile home parks or RV parks because they don’t really meet the definition of a mobile or recreational home! They are not on wheels and they cannot be transported from one spot to the next without being loaded on a truck bed and moved. The outcome is still in the air, but recent news is that HUD is taking steps to outlaw the placement of tiny homes in mobile home parks.

Local Ordinances Need to Be Dealt With
Then there are local ordinances which many first-time homebuyers aren’t aware of. Most people don’t know that in most locations you just can’t buy a structure and place it on your land without running water, sewage and electricity. Local and county ordinances forbid dwellings to be built, or delivered as the case may be, without a county official inspecting the property and seeing whether or not all ordinances are being met. Many times, the cost of having a well and septic tank dug costs more than buying a decent previously owned home that is much bigger and definitely more comfortable to live in.

Anyone considering buying a Tiny Home with the assumption that you will be able to afford the cost of the home itself and a place to put it should take the time to investigate the real costs of owning one. You just might find that you could obtain a mortgage at a 30 year fixed rate that is within your budget, keeping you from all the hassles of complying with local and county ordinances and regulations. You can get a mortgage on a home, but can you get one on a Tiny Home? That is the $64,000 question that remains to be seen.

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