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Barna Log Homes, Inc. Newsletter
www.barnagreatlakes.com
greensloghomes@msn.com
This issue: Financing Your Log Home
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Featured Article: How do I finance the construction of my Log Home?
Since most customers will require the services of a lender in order to build their log home, it is important to understand the financial process during the construction process.
We have found that many home-mortgage lenders claim to offer construction financing, but the reality is very different. Numerous customers have reported horror stories of working with lenders who were unknowledgeable about the log home construction process and ill-equipped to serve the customer's needs. These problems include delays of several weeks in processing draws, refusal to advance funds for reasons not made clear when the loan was closed, underpayment of draw requests, and other confusions. We have come to realize that it is in our customers' best interests to work with a lender who has experience dealing with log home construction.
Generally speaking, you will be dealing with two types of loans. These are:
1. A construction loan. This is a simple-interest loan for a limited period that covers materials, labor and other construction expenses only. A construction loan is usually structured so that you borrow an increasing amount of principle (as construction progresses) and pay only interest (and only on the amount you have actually borrowed). You do not pay off any of the principal during the duration of the loan - instead, when construction is completed, the principal balance of the construction loan is paid off by taking out a mortgage loan.
2. A mortgage loan (sometimes called an end-mortgage). This is a conventional principle-and-interest home mortgage loan.
Although Barna Log Homes, Inc. does not offer financing, we have compiled a
wide selection of lenders with whom our customers have had a favorable experience.
Feel free to contact our office for more information on these lenders.