FIND­ING FI­NANC­ING

Log Home Living - - PLAN -

Some them­selves,to bor­rowlog home money. which buy­er­sis great!are in Buta fis­calif you’re po­si­tion­like most,to fi­nance you’re their go­ing home­sto need If you are pur­chas­ing a pre-ex­ist­ing log home, the process mir­rors ev­ery other kind of home loan. But if you’re build­ing from scratch, you’ll likely need two loans. One is the stan­dard mort­gage, rang­ing from 15 to 30 years. The other is a short-term con­struc­tion loan. The con­struc­tion loan pays for the ma­te­ri­als and la­bor needed to build your home. These loans are made for pe­ri­ods from six to 18 months and have higher in­ter­est rates than mort­gage loans be­cause, as far as banks are con­cerned, they carry more risk. Lenders will want at least a 20 per­cent de­posit on a con­struc­tion loan be­cause of that risk. Typ­i­cally, you pay only the in­ter­est un­til the pro­ject is com­pleted and the mort­gage takes over and adds the con­struc­tion loan prin­ci­pal. Be­fore grant­ing con­struc­tion loans, lenders care­fully study the pro­ject and eval­u­ate the builder’s abil­ity to com­plete the home ac­cord­ing to the plans, bud­get and sched­ule. Once the loan is granted, the lender dis­burses the money ac­cord­ing to a draw sched­ule, which pays cer­tain amounts at var­i­ous milestones to cover work com­pleted up to that point. Progress is ver­i­fied by on­site in­spec­tions, which de­ter­mine that the la­bor was per­formed and the spec­i­fied ma­te­ri­als were used. A big dif­fer­ence be­tween con­struc­tion loans for log homes and other cus­tom homes is that the log home com­pany pro­vid­ing the pack­age ex­pects to be paid a sub­stan­tial down pay­ment be­fore cut­ting and ship­ping the logs. Avoid mak­ing a large down pay­ment for your pack­age un­til you’ve se­cured your fi­nanc­ing. For more in­for­ma­tion about log home fi­nanc­ing, visit loghome.com.

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