Log homes are still a novel concept — whether they’re placed in a neighborhood setting or in the rural countryside.
For that reason, it’s difficult for a lender to determine the relative value of a new log home.
Specifically, there are fewer comps (or log homes of similar square footage that have recently been sold in the same area) from which to make value comparisons. Not to mention the fact that the value of a finished log home may be significantly different than a house of similar square footage.
As if financing a log home is not hard enough, we found it especially difficult to obtain financing for our log home during a time when the economy went sour.
The Future Looks Brighter
Despite the mortgage crisis and the current state of the economy, there are some positives:
- Building costs and mortgage rates will never be lower.
- There are more banks willing to lend money for log homes than in the past.
- There are actually more banks that specialize in log home mortgages than ever before.
Together, these things help make the process of buying a log home a little bit easier these days than in the recent past.
Before Financing Your Log Home
Here are 3 things that are imperative before trying to obtain financing for your log home:
- Have enough money for a down payment (20% or more)
- Establish a relationship with a log home friendly bank
- Have a list of banks willing to lend for log home construction
Check out this Top 10 List For Financing A Log Home Or A Timber Frame Home from PrecisionCraft.
Our Log Home Financing Ups & Downs
Some things that we’ve learned firsthand about log home financing (in the order we learned them):
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