Tiny House Loan Process in New Zealand
In this article, we outline what documents you need and the process for getting a tiny house loan in New Zealand.
First things first: tiny house loan requirements
First things first, tiny houses are a hot topic at the moment and there’s a great number of people looking to figure out how exactly to get a tiny house loan. While it’s not impossible to get a tiny house loan, you have to realise – as with any other sort of home loan – nothing will be handed to you on a platter. To get a tiny house loan, you need to be over 18 and provide evidence of identification (of the type that is acceptable by law) of yourself and your spouse or two people acting as guarantors of the loan – these three documents are enough for most tiny house loans. A tiny house loan will be a secured loan, meaning you’ll need to have some sort of security, such as a car or the tiny house itself. In other words, tiny houses are treated just like any other fixed-property would be. The greater the risk your tiny house presents to the bank, the lower the chance of getting accepted for a tiny house loan.
What tiny house loans will you come across?
Typically, tiny houses are placed on wheels and classified as RVs (recreational vehicles) which means they’re subject to RV loan interest rates. With a tiny house loan, you’ll need to provide the bank with the purchase price of your tiny house, which they’ll take at face value. It’s rare for tiny house loans to be interest-only, which means you’ll need to make repayments on principle and interest every month. As with any other loan product, tiny houses come with different rates depending on your credit rating; the higher your score is, the lower your tiny house loan interest rate will be. Tiny house loan interest rates vary from bank to bank, with tiny houses being a tiny subsection of the mortgage market so banks are able to pick and choose who they want to lend tiny houses out to, meaning it’s possible for you not have tiny house loans available at all.
How do you apply for a tiny house loan?
Step 1: Find tiny house loans available
The first step in the tiny house loan process is to find tiny house loans that are available to you. As previously mentioned, tiny house loans don’t fit into a tiny box and there’s not as many tiny house lenders as traditional home loan lenders so if your initial tiny house loan applications comes back with news of unacceptability, don’t take it bank. With tiny houses as such a new market, tiny house loan applications come at no cost and you shouldn’t run into any form of rejection (although tiny houses are subject to credit approval). If your first tiny house loan application is rejected, it’s time to get more creative; the interest rates on tiny houses are generally pretty low and there’s a number of tiny house loan products available for you to choose from. Just be sure to bring your tiny house loan application in on time, otherwise you might miss out on any tiny house loan interest rates that are being thrown around at the moment.
Step 2: Apply for tiny houses loans after searching for loans
Once you’ve found tiny house loan interest rates that work for you, it’s time to get down and dirty with tiny house loan applications. This can be done online in a matter of minutes and in most cases, without an application fee so the barriers to entry are small. It is in your best interest to submit all tiny house loan documents as quickly as possible to be in with tiny house loan applications that are ‘in demand’ for the tiny house market.
Step 3: Welcome to tiny house loans
Congratulations! You’ve made it through the tiny house loan application process. All you need to do now is sit back and wait for your tiny house loan funds to transfer into your bank account – at which point you’ve got the tiny house of your dreams.