Log Home Financing

A log home is something that is much coveted by many families as an attractive holiday escape or a permanent cozy residence. Designing and completing a log home is not as easy as it seems. It requires careful planning and budgeting done way in advance. You have to get your finances in shape before embarking on your log home project. It certainly wouldn't be desirable to run out of finances before your log home is completed.

Size up your Finances

Take a good look at your finances. Even though you intend to get your log home financed mainly through a construction loan, you'll still have to invest a substantial amount of your own funds. Financial experts recommend that you need to have at least 40% of your total project cost in cash to ensure that the project gets completed without a hitch. This is because you have to provide for contingencies. If there is a delay or an increase in material cost, having ready cash will tide you over this kind of a crisis. On the other hand, a lack of finance will only cripple the project and wind up escalating the costs. So before you apply for external sources of finance, make sure that you have a fluffy cash cushion.

Obtaining Finance

You can apply for a loan from log lenders or banks and financial institutions. The downside of applying for a loan from a bank is that they tend to be very stringent in their rules. Most of the time, the bank will disburse the loan only when the material is on site and the construction is on the verge of commencing. However, the suppliers have to be paid before the material gets to the site. On the other hand, a log lender will be more accommodating and will ensure that you get the requisite finance at the appropriate time. That said, whether you intend to approach a bank or a log lender for a loan, your best bet would be to try and get the largest construction loan possible. You'll have to apply for a construction loan since you'll be building your log home from scratch. The tenure of construction loans tends to be between 6 and 18 months. So, once your house is built it'll have to be converted into a long-term mortgage loan. Shop around for the best terms with respect to interest rates and repayment period.

Making Enquiries

Even before you begin the process of applying for a loan, you can visit lenders and make enquiries. All you have to do is discuss how much the project is going to cost you and how much finance you can hope to obtain. Also maintain an adequate margin ideally 10% to 15% to provide for unforeseen circumstances. You could also get your credit score from the 3 credit rating agencies namely Equifax, Experian and Transunion. This is so that you'll have an idea of where you stand and whether you qualify for a lower interest rate.

Exercise Prudence

There are many ways in which you can exercise thrift in your spending. You can economize on the flooring, doors and windows of your log home. Take your time to look around and get the best deals on everything. Select fittings and fixtures that are simple yet stylish. Remember, that it is the final touches to your home that will send your budget spiraling out of control. So be wise and go in for the best bargain. There are many thrift shops and local stores where you can get what you're looking for at a fraction of the cost. So, if you want the dream of owning a perfect log home turned into reality, start planning in advance and make sure that you have the adequate funds at your disposal to see things through completion.

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