Straight answers
What is the difference between a chattel loan and a mortgage?
A mortgage is secured by real property: the land and whatever is permanently attached to it. A chattel loan is secured by the home alone as movable personal property, the same way an RV or a boat is financed. For a tiny home the difference is not decided by size or quality, it is decided by whether the home is permanently set on a foundation. A modular home on a foundation is real property and takes the mortgage path. A home on wheels stays personal property and takes chattel or RV lending, which carries shorter terms and higher rates than a mortgage.
01 — The longer answer
What the rate gap costs over the loan
The cost gap is real and worth seeing before you choose. On our own financing illustrations, the same home costs meaningfully more per month on the chattel path than on the mortgage path, because the term is shorter and the rate is higher. We would rather you learn that here than at the bank.
What decides which path you are on is the certification pathway you pick at the start, not the one you would prefer at the end. That is the argument for settling the question before the build rather than after it.
There is a third route that is neither, and it is the most common one for backyard projects: if you already own the property, the equity in it usually funds the build, and the loan is against your existing home rather than the new one.
02 — Where to go next
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