Log Home Construction Loan
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Log home construction loans provide the money needed for consumers to build a log house. This is granted to a borrower who acts as their own general contractor to build a house for personal use or for an owner who hires a contractor to construct the home for personal use, resell, or investment rental property. Log home construction loan interest rates are almost always variable starting at prime plus 2 percentage points. This funding will last 6 months and can be extended depending on the length of time the builder takes to complete the project. Loan to value ratios vary with each program, but typically hover around 90%, with 10% of the total amount as a down payment. "Even to prepare me timber in abundance: for the house which I am about to build shall be wonderful great" (2 Chronicles 2:9).
The approved amounts range from $50,000- $350,000 and sometimes higher if multiple houses are being constructed. A log home construction loan is dispersed in increments periodically either based on time or work completed directly to the contractor. There are long and short term log home construction loans to meet individual needs. In order for a draw check to be earned, an invoice must be mailed to the appropriate servicing department. A two party check will be sent to the borrower, requiring both their signature and the signature of the contractor.
An inspection must be done prior to disbursement of funds to the borrower or a contractor. Allowances for over-runs are built into the log home construction loan, but if an increase is still needed, the amount can be increased if the borrower qualifies for a higher amount. There are no prepayment fees on log home construction loans and they must be paid off with a conventional loan when the project is complete. Funding of this nature is approved upon this contingency. Failure to repay the borrowed amount in full will temporarily require payments to be made on the original amount; however, as soon as the borrower qualifies for a traditional lending program, they must find one.
Those that are seeking better interest rates should obtain copies of their credit reports from one or all three national credit reporting agencies; Equifax, Experian, and TransUnion. A credit report contains a score which determines how high or how low an interest rate for log home construction loans will be. High scores will bring low interest rates and low scores bring about high interest rates. The lower the interest rate, the lower the log home construction loan monthly payments will be, since the borrower is only making payments to interest throughout the construction process.
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