TinyHouse43's Building Blog

From Texas-sized 2 Tiny House For Three

If you’re planning to use your “RV” as a residence, don’t admit it…

…at least not to a bank anyway.

We’re in the process of financing the Tumbleweed Amish Barn Raiser model, and after speaking with the finance co rep today I decided to circumvent their process all together. They’re nice enough and explained things well, but the options are definitely less than ideal for us. Anyway, long story short, I called one of our 2 primary banks and spoke to a great guy who actually immediately “got it” when I explained our tiny house plans. He suggested and then explained the highlights of a title loan (the same kind you get for a car) for our “travel trailer,” and having used this bank for other types of loans (including our current mortgage and vehicle) I opted to use the online application I’ve become familiar with over the years.

Well, I reached a question that asked if I intended to use the “travel trailer” (I think it actually said RV) as a residence, and being the honest woman I am I clicked the “yes” button and hit submit at the bottom since the whole plan is to sell our house and live in the tiny house “travel trailer” as we pitstop in Colorado for a year or more and then travel cross-country through the US and Canada. I don’t think I’d had time to blink before a denial message popped up on the screen thanking us for applying and telling us we’ll get a letter in 5-10 business days blah blah blah. Lame. On a hunch, however, I reapplied with identical information and clicked “no” for the residence question, and this time the page loaded over about 30 seconds. It didn’t show the instant approval I’ve had from them before, but at least they’re “reviewing” it this time.

The rate isn’t great (14.xx% for 36mo, which was the time frame I chose and could have gone as low as 12mo and as high as 82mo), and the payment would be about $500/mo. That kind of stung since a completed $66k Tumbleweed is supposed to cost around $500/mo, but of course that’s in ideal circumstances with 10% down and for potentially a longer time (I didn’t see a specific one listed). I ran this as an “all-in” loan with no downpayment just to see what I could work out, but we actually have money to put down anyway. I also reminded myself that as soon as our house is sold we’d drop $1945/mo in mortgage, $660/yr in HOA fees, about $200/mo electric/gas (average over 12mo), $85/mo in water/trash/sewer, and about $200/mo collectively in various other home ownership related costs. Five hundred per month suddenly doesn’t seem so bad!

Anyway, I’ll post again once I hear more about this option. The lesson learned, though, is apparently to NOT plan to use your “RV” as a residence in order to get banks to cooperate. I guess it’s because these kinds of loans are title loans, where they will repossess the RV if you don’t pay. I’m fairly certain there are more stringent laws governing when a bank can take someone’s actual home/residence vs. a recreational vehicle for non-payment (though they certainly aren’t shy about foreclosing on people these days!), so I can see their point somewhat. We’d have ours paid off before we even left the state with it most likely, so no worries for the repo man to come knocking on our door! lol

Now, off to find a stainless steel sink with a washboard integrated in one side vs. the acrylic version. I think that will solve our basic laundry problems AND be our kitchen sink, all in one! 🙂

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