Southland Log Homes has assembled a variety of national and local lenders who can offer the financing for your log home that is right for you. Let us introduce you to a qualified lender who knows log homes and can understand your needs.
The mortgage market has been in a state of change in recent years, and mortgage financing for log homes also continues to evolve. Here are a few things to keep in mind as you arrange financing for your Southland Log Home:
Now more than ever, you need Southland’s helping hand arranging financing for your new log home.
Only a small fraction of mortgage lenders currently offer loans for construction of new custom homes, but Southland has established a network of these Construction Lenders to assist you in financing your log home dream. While some may require that your property be within a reasonable driving distance from their offices, others are able to lend on a larger geographic scale, financing primary residences and second and vacation homes; both nearby, and in more remote areas.
Required loan‐to‐value ratios have increased, meaning owners must be prepared to put a larger amount of equity into the project. While most will allow land equity to help meet the stricter requirements, many require a portion of that equity to be in cash. Generally, lenders will expect the owner to have at least 20% equity in the form of cash or land equity. Also, documentation requirements have increased. Lenders will likely require income records or tax returns, bank and investment records, and other financial information for at least the last two years.
If you currently own a home, even one that you are planning to sell, you may be able to use a Home Equity Line of Credit (HELOC) to help finance your new log home. This process may be much simpler and faster than the alternatives, so it is worth exploring.
In today’s environment, it is not at all unusual for one lender to turn down a loan request that a second lender will readily approve. For this reason, it is a good idea to have at least one or two alternative lenders identified in case the initial attempt is not successful. Turn to Southland to help you identify the best log home lenders for your particular situation.
Understand the value of your home. Although appraisals have become very conservative, knowledge of log homes can help ensure that you receive a fair and accurate appraisal. It is important for the appraiser to understand the unique components and custom features of your log home. Some examples might include: open beamed or cathedral ceilings, custom wall and floor coverings, custom trim and cabinetry, custom stairs and railings, custom masonry and stone fireplaces, extensive porches and decks, and other personalized features. Log homes are not ordinary homes. They are a lasting legacy with unique features not found in conventional stick framed houses. Southland submits to each appraiser a log home fact sheet with their log home plans designed to aid the appraiser in identifying the unique qualities found only in a Southland Log Home.
Most lenders now require the use of licensed and insured building contractors to construct your log home. Southland has developed a network of licensed and insured Preferred Builders that satisfy the lender’s criteria for building a quality log home. In addition, these Preferred Builders offer an industry leading warranty designed to enhance the peace of mind that only a log home can provide. If you intend to construct your own log home, a few lenders will still allow the owner to act as the general contractor in select cases where the owner has documented expertise enabling him/her to perform the general contractor role.