Tiny houses or prefab homes are your traditionally constructed home, except as the name suggest they are tiny. Generally, the house will not be more than a couple of hundred square feet in total. This is a very interesting and minimalistic style of living, if you are not too particular about how you live or with what you can make do without compromising on the comfort.
There are a number of factors that should be taken into account before you decide to shift into a tiny house.
Ask yourself this very important question, can you really live in a tiny house?
Before making a long-term commitment to buy a tiny house or prefab home, try it out for a few months. Rent a small place and furnish it to your liking, the way you would want the house to be and just explore all aspects. Space will be a big issue, since there won’t be much of it. In fact, tiny houses are no bigger than you standard RV sizes, with similar layouts. These houses may be very cheap to rent, and for that matter purchase. But even an amount like $25000 for the base model is a big commitment, especially if you are unsure about adjusting to the layout.
Also, if you are planning to share the house with someone, maybe your spouse, girlfriend or partner, you might want to ask them to try it out as well before making the decision. Normally tiny houses are preferred by people who have already lived previously in smaller spaces and rented units, sometimes minus the privacy. Having your own tiny little house will certainly be a better option for such people with the added privacy and luxury to design and modify your own space.
Tiny houses are pretty similar to mobile homes, and are a smaller version of the mobile home. You have the option to have your house on wheels to be towed in case you are planning to relocate or can prefer a fixed foundation for the same. However, a proper foundation will require a number of permits and inspecting, as opposed to mobile homes which can be just hitched to the back of your trailer and towed with ease.
You still have to decide whether to opt for a tiny house which has already been built by someone, or start fresh. Just because the house is tiny, doesn’t necessary mean it will be very easy to construct. Tiny houses require just about every building skill essential for a traditional home. At the end of the day, you have to weigh in all your options and decide whether to buy a tiny house, a similar size RV or rent a unit for that matter.
A reverse mortgage is a type of loan that allows homeowners to receive payments on their house as opposed to them making payments to the lender. At first glance, this option seems too good to be true. But, before committing to it, there are some nitty-gritty details that people must consider when opting for this type of financing. So, here is some information regarding the pros and cons to consider when getting a reverse mortgage.
Advantages
Disadvantages
A reverse mortgage is a loan that allows individuals older than 62 to improve their financial well-being. They can convert part of their home equity into lump sum cash, fixed monthly payments, or line of credit, according to their preference. The money can be used to pay for medical bills, in emergencies, or to pay off a mortgage. Here’s what you should know about reverse mortgages in case you’re looking for one.
How much can you borrow?
For reverse mortgages, the loan amount can’t exceed the value of the property against which it is borrowed. Federal regulations require lenders to ensure that the loan amount doesn’t exceed the value of the house by structuring the transactions accordingly. Additionally, these regulations state that the owner/borrower is not liable to pay off the balance amount in case it exceeds the property value.
How are reverse mortgages paid for?
A reverse mortgage is payable when the borrower sells the house, relocates permanently, or dies. Unlike forward mortgages, reverse mortgages don’t need the borrower to make any monthly payments. They are only liable to pay interest on the money received, which is rolled back into the loan balance. While the owner gets to keep the title to the home, their home equity reduces over the loan tenure.
Who can take a reverse mortgage?
This type of loan is ideal for seniors and retirees whose net worth comes mostly from the value of their home. Seniors who don’t qualify for a home equity loan or can’t refinance due to limited cash flow or poor credit can opt for reverse mortgages. Home Equity Conversion Mortgage (HECM) for purchase is a reverse mortgage that allows seniors to buy another property. That said, it is complex, and you should study the risk factors before getting one.
What are the risks associated with reverse mortgages?
Reverse mortgage scams are not unheard of. Unreputable vendors could offer to help seniors secure reverse mortgages by undertaking house repairs. They don’t provide quality results and get away with the homeowner’s money instead. For spouses living together in a home with only one spouse named as a borrower on a reverse mortgage, the other spouse can lose the home if the borrowing spouse dies first. Besides, reverse mortgage lenders charge fees and closing costs and may also charge mortgage insurance premiums for federally-insured HECMs.