FINANCE from lop home construction to a log home mortgage...not so hard.
Log home financing is very similar to framed construction. A construction loan is a short term (usually 6, 9, 12, or 18 months) loan, and typically it will convert to a conventional mortgage at the end of the term. Interest is a little higher during the short construction period, but you have a small payment, as you typically only pay interest on what you have borrowed during the process, so way, way less than a house payment. After about 12 months, (most common), you close and your loan is converted to a common 30 year mortgage. You can always refinance a finished home easily later as well if interest rates are more favorable, and you will also have much more equity at that point! Here are some things to remember, look out for, and shop for.

1) Construction loans typically require a down payment, either in equity on your land (the difference of what you owe and what it is worth), or cash reserve, and that down-payment, or deposit, to be 20 to 25% (75 to 80% debt to equity, or “Loan to Value”). Mortgages with nothing down are very difficult at this time. REMEMBER…the most important thing…THOSE THAT HELP US DESIGN THEIR LOG HOME AROUND THE BUDGET THEY CAN AFFORD…SUCCEED!!! Most of the time someone says ” I want it just like this, this is my dream home”, without first laying out a budget that plan will fit into, we see that project fail.

2) Some banks or mortgage companies do not offer construction loans, so if you don't own your property free and clear but have some cash, you need to find one that has the right construction loan product (kind of like trying to buy a Ford at a Toyota dealer, etc.). Shop on the phone first, call your local bank, then others. Tell them you want to build a home, and do they offer construction financing? You want to FINANCE from construction loan to log home mortgage. Equity loans (you own the property already, or can borrow on a current home) are fairly easy to get and most banks do offer those loans, especially if the debt to equity ratio is favorable to them.

3) Loans take time, and many forget that, and think they can get moving when the time is closer to the build. Most banks and finance companies want an appraisal on what you are doing. This takes extra time too. Get a preliminary loan approval first. That is usually fast, and it tells you what you can borrow, so you can determine your total budget for the project, basically the MOST IMPORTANT THING to start, so design first, around the budget! Appraisers wont find new log homes that sold in the last 6 months, so don’t give up, they can look at what you are spending (cost basis), your property value, and a few homes that sold (probably some 30 year old homes that are beat up and foreclosed (just kidding), but basically 3 homes for comps (that sometimes won't help you, as they are older framed homes usually) are needed. Loans can take months, not days or weeks, so help them, by staying on top of that part. Give them your plans when things get rolling, your bid, and your turn key. Stay after them and push to get it done. They say weeks, but it takes longer, always. Be prepared. We just want to help here, and expect it to move more slowly than you imagine. Sometimes, a bank can move quickly, but that is the exception! We can move as fast or slowly as you need, so sometimes it is just a matter of calling for some construction help from friends and family first, for contractors, subs, basically stay with this, as don't just make one call to someone that you heard might be good...and they are way high on an estimate...it will deflate your hopes. Get several bids or estimates so you have a good feel where things are.

4) Don’t give up. Many of our customers were denied by the bank, and then they went to another bank, made a new and better proposal, and several on the third and fourth try succeeded. The biggest problem you will face is not getting the right log home plan done for the right price, it is getting your log home financing in order, to fit your budget, and have the plan you want. The plan you want (your dream home), and the budget, are two different things. Those that design around the budget, with what they can afford, succeed! NOW>>> Visit our About Us button, to get an idea how to start, then proceed to Getting Started, read that, then start looking at pictures of the log home interior and the exterior of the log homes, then for sure, look over some of the best Log Home PLANS! Visit our Discounted Log Homes page, learn how to save money, read up on how others just can’t compete with our pricing model. Materials slowly rise in price (we have been in business for 23 years, and have seen this almost every year), land goes up, so we feel now is always a good time to buy, as you can always refinance a finished log home with a lot of equity at a better rate when they become available.