Dome homes are a spectacular option for alternative living, and dome home financing can indeed be a much easier entry to home ownership than a traditional home with a traditional mortgage. Dome homes don’t look like a conventional home, nor do they cost as much as one does. They cost a lot less, and are a lot stronger than the unconventional home.
But why would anyone in their right mind want to get a dome home in the first place?
Dome homes are strong. How strong? They can withstand winds from hurricanes and tornadoes. They are also strong enough to retain their structural integrity from an explosion from the inside.
Another good reason to look into building a dome home is that the shape aides in reducing heat retention 30% to 50%. That can save you a nice amount of cash that can be used for other needs.
Since we’re on the topic of saving money, the materials to build a dome home also costs much less than building a conventional home. It usually costs about one-third the price.
Now that we know the majority of reasons most people invest in a dome home, let’s look at how to go about getting the financial help to build your dome home.
Dome Home Financing Factors
Traditional lenders (i.e. banks and mortgage brokers) almost always require an appraisal before approving any type of mortgage or construction loan. And they likely will get hung up on this early step, since appraisal values are based on nearby similar homes that have recently sold. This helps the financial institution determine how much money you can get to build your home by giving them an idea of what the resale value of the finished structure might be.
There are some things you can do to maximize the appraisal value of your dream dome home though. The simplest will be to build it in an area that has other dome homes. More comps means easier appraisal.
If this isn't an option, you may have to do some legwork and go looking around the neighborhoods to see if there are any homes that are similar to what you’re looking for in a home or if there are any finished that just aren’t yet in their database. Look for log homes, passive houses, or pre-fabricated homes, as these also require an unconventional loan.
It is generally going to be best to speak to more than one financial institution to better the odds of getting a loan. Especially consider visiting a local bank. It is easier to establish a relationship with the people at a local bank, and a relationship can lead to mutual trust. You will also be better able to communicate to the loan officer that you are serious about your decision to build a dome home and that you are able to repay the loan.
Keep in mind that a dome home is categorized as an unconventional home and many institutions may not have much experience dealing with these types of homes. You may have to look around until you find a bank or mortgage broker who has the necessary experience.
Other Dome Financing Options
Sometimes you truly just have to get creative. Consider any of these alternative loan options:
- Personal loan: usually for smaller amounts than a mortgage, but is based on credit score, debt, and income without requiring collateral.
- Portfolio loan: offered by institutions who keep the loan in house instead of selling in the secondary market, therefore are likely to be more flexible with their loan criteria.
- Friends or family: if you're willing to go there. It certainly carries the risk of straining the relationship, but it has the benefit of defining the loan terms among yourselves.
- Crowdfunding: You'll likely need a really cool plan and a solid number of social media followers.
- Line of credit: from equity in other real estate or investments you own.
- Credit card: be very careful about the purchase amount, interest rate, and timely payments, of course, but there are certainly circumstances where this could work.
- Life Insurance: certain policies will let you take a loan against the value of the policy.
Dome Home Kits, Custom Builds, & Persistence
Dome Home Kits or other pre-fab home kits can often cost less and may be a little easier for conventional lenders to approve, since they are usually designed and manufactured to rigorous standards. Shameless plug here: we offer in-house financing on our dome kits.
When looking to do a custom build, it is important to understand your location. Certain materials are easier and cheaper to purchase in certain locations, and some of them may be purchased with a traditional loan instead of trying to have it added to the unconventional loan.
If all else fails, stay vigilant. As dome homes become more abundant in more areas, cities and counties will adopt alternative building codes. That means more banks will begin to lend loans for unconventional homes, which means a higher chance for you to build your dream dome home. If you’re in a hurry to build, try looking at other locations or do some research as to what states are more open to dome homes and begin there. If there’s a will, there’s a way.