How to Finance Shipping Container Homes

How to Finance Shipping Container Homes

Ways to Finance Shipping Container Homes

If you need to finance shipping container homes, please understand that securing a loan is extremely difficult. It is considered a huge risk by the lender as one can easily run away with the loan amount. Most banks and moneylenders will shy away to provide a loan for a shipping container home. There are two primary reasons involved:

1) These homes are non-permanent structures
2) The lender cannot predict the price of a shipping container home for marketing it, in case of non-payment of the loan amount.

When the risk involved is higher, we need to look for unconventional options. We will be covering these options here which you can utilize for financing your shipping container home.

1. Personal loan

An unsecured personal loan doesn’t require any collateral for security. For those of you who have a good credit score, it can be a viable option. The interest rate increases with a decrease in the credit score. So, if you have a poor credit score, you will end up paying a huge amount as interest.

2. Self-funding

To avoid the payment of interest on money borrowed, you can also consider funding your project gradually. Even while securing a loan, the bank requires you to invest some amount in your project. You can start building your home with those savings. Use the incremental-housing model to construct the home in parts depending on the availability of funds and time. You can start by acquiring the shipping containers as they are the base for the whole structure. Thereon, you can work on the modification part at your pace.

If you choose the route of self-funding, your project might take extra time to finish. It is because you will be devoting time to the building process only when you are free. Also, the construction will depend only on your funds. If the funds are not available, you don’t have another option than waiting. On the other hand, once you finish the construction, this method doesn’t leave you in debt. That is the sole reason for including this method here. Building a debt-free house on your own terms is what self-funding offers.

3. Home equity loan

This financing method is for you if you are considering a container home as an additional one. Your primary house can help you secure a home equity loan up to two-thirds of the value of that house. You can pay it off just like any other loan. The interest rates charged for these kinds of loans are generally higher than mortgage loans. It can be the best option for you if your primary home is located at a desirable location. This reduces the risk of the lender as he can easily sell off the property on non-payment.

4. Manufacturer Financing

Following a DIY route is normal in the construction of a container home. But if you are choosing a readymade container home, you might secure financing from the home manufacturer. Check for the availability of different container home manufacturers in your area and talk about the financing aspect. You can select the manufacturer offering you the best finance deal. We have covered a list of container home manufacturers in different parts of the world on this website. You can find the one that suits your requirements including financing.

5. Buy a factory-built home

Factory-built container homes are constructed while keeping in mind the local building codes. They comply with all certification processes while building and employ certified engineers for construction. The materials used for building these readymade homes are similar to the ones used in traditional construction. Plumbing and electrical fixtures also comply with the local code.

These prefabricated structures are created while keeping in mind the location they will be placed upon. These are manufactured in a way to permanently fix them to a foundation. To obtain local permits, it is essential to prove the permanence of the home. These factories ensure to make the container homes in compliance with all local laws. This, in turn, makes it easy to obtain finance for buying your container home. You can even utilize traditional financing options like bank loans with this method.

6. Microfinance

Microfinance can be helpful in the case of a poor credit rating and a requirement of a small amount. They are not restricted to small business owners and entrepreneurs anymore. You can utilize this option for financing your shipping container home for securing funds at an affordable rate. Consider visiting a microfinance institution in your area to find out the deals available.

7. Sponsorship

If you have chosen the DIY route for building your container home, you must consider this financing option. In this digital age, you can showcase your project’s progress on social media while promoting the material you use. The manufacturers of these materials can provide it to you for free if you already have an audience. It is a win-win situation for both – you and the manufacturers. You get free materials for constructing your home. The manufacturers receive free publicity on the social platform in exchange for the products they delivered to you. It is like an advertisement for them. You can record your progress and share it with the world through Youtube. It can also help you earn some money in the form of a commission by promoting the products you use.

8. Borrowing from close ones

You can consider borrowing funds from your family and friends who understand your dream. Depending on your closeness, you can also offer interest on your borrowings. If you would like to involve a lawyer in writing a formal agreement, you can mention the terms thereof. This will help in maintaining trust between you and your friends and keep things clear from the beginning.

9. Government Grants

In some areas, the government offers incentives to people for building their homes. You must inquire about the availability of any such option in your area. Also, some prerequisites must be met before applying for such grants. Consider fulfilling the mandatory requirements to prevent the rejection of your grant application.

10. Credit Card

You can consider financing your shipping container home through credit card debt. This financing method shall be utilized if you are expecting to receive funds from some other source very soon. Non-payment of credit card debt for an extended period can add a lot of debt. Therefore, use this method only when you are sure to repay the amount in a short time.

Final Words on how to Finance Shipping Container Homes

Several options are available for financing your shipping container home. You can utilize the one that matches your needs. You can also consider mixing two or more options for financing your home. For instance, self-funding can be combined with microfinance or borrowing from close ones. This way, you can collect more funds for your dream home.

Cost of building a shipping container home

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