What Should I Know About Financing a Log Home?
As you begin the process of financing your log or timber frame home, you will discover that there are a number of differences compared to financing a conventional home. Below is a list of items to consider:
Selecting A Lender
- There are two types of Construction loans: A “Two-time Close,” means the lender will provide you with a construction loan that will need to be refinanced into a new permanent mortgage loan once the home is completed. This type of transaction requires that you re-qualify for the new permanent mortgage and it also requires that you pay two sets of closing costs.
- A less expensive approach is a “One-time Close” loan. Here, the lender provides one loan for the construction period. When the home is finished, the loan will automatically transition to a permanent mortgage. Remeber, lenders policies vary, but for the most part, this type of loan will not require you to re-qualify or pay new closing costs when the home converts to the permanent mortgage.
- During construction, you will pay an interest only payment based on what you owe each month. As your balance increases, so will your monthly payment. When the home is finished, you will begin to pay a Principal, Interest, Tax and Insurance payment similar to a normal conventional mortgage loan. Construction loan terms vary from 6 months to 12 months and beyond. Check with your lender.
- Find a loan officer who is experienced in construction lending, preferably experienced in log homes or timber frame construction. You want to deal with an expert that you can rely on during the construction process.
- Make sure your lender can accommodate the required payment terms of your log home or timber frame company. Understanding this upfront can save many challenges later in the process.
Getting Your Loan
The lenders listed below are either regional or national lenders specializing in the financing of log/timber homes and log/timber home construction loans. We also encourage you to check with your local banks and credit unions.
CLICK HERE to find a local BB&T Branch Loan Officer.
- Serving NC, SC & VA, AL, DC, FL, GA, KY, MD, TN, TX and WV
- Construction to Permanent Financing
Citizens Bank – Not your typical bank. ®
Contact: Loan Office, 1-800-288-5569
- Coverage Area: Connecticut, Delaware, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan,
New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, and West Virginia.
- Construction to permanent mortgages
- Primary & Secondary Home Buyers
- Online Application
Who we serve:
- Country homes
- Purchasing bare lots
- Lots and home construction
- Modular, log and other unique homes
- Refinancing existing homes
- Coverage Area: CT, FL, MA, ME, NH, NY, RI, & VT
- New Home Construction Loans
- Help for First Time Home Buyers
Atlantic Union Home Loans Division
Apply for a mortgage on their website
Customer Care: 800-432-4195