Your dining room table is covered in sales brochures and stacks of log home magazines. You finally feel ready to turn your domestic dream into a reality. But who should you call first? What should you ask? Before you begin, it's a good idea to understand what roles log home professionals play, along with what you can expect from them—and what they'll expect from you.
As with any home building project, you won't get far without a budget. A mortgage lender will discuss your long-term goals with you, helping you to determine just how much home you can afford. Because financing a log home project is different from financing a stick-built home (they follow different draw schedules and construction timelines), it's a good idea to find a mortgage lender who has experience financing log homes.
When do I need one? Many experts suggest contacting a lender first to discuss your options and learn about formal and informal pre-qualification, a critical starting point for buying a log home.
Where do I find one? You'll find many mortgage companies by searching online, reading log home magazines and attending log home shows. Or talk to your local bank, contact your local or state government's housing/development authority, or ask for referrals from log home owners and professionals.
What should I ask? The most important question is simple: Does your company have experience financing log homes? (If the answer is "no," keep looking.) Find out what specific documents you'll need to provide for loan approval and whether the lender has experience requirements for log home builders or owner-builders. If you have a poor credit history, ask for suggestions on how to clear up errors or improve your credit rating.
How should I prepare? Gather your required documentation into one expandable folder and keep it close at hand. (See below for a list of common documents and information required for financing a log home project.) Also consider your current and future lifestyle—and how much "house" you really need and want. There may be a difference between what you can afford and what you are willing to spend.
|You can wrap up a loan in as few as 10 days, but it's more realistic to plan for a full month. To help keep the process moving, gather all your pertinent information and keep it in an expandable folder. Losing just one important document can jeopardize your financing, so keep all of these items close at hand:
If you are self-employed or own a business, you will also need:
- Photocopies of your picture ID and Social Security card
- Names/addresses of current employers
- Pay stubs for at least one month
- W2 forms for the most recent tax filing year
- Tax returns for the past two years
- Pension award letters
- Life insurance records
- Copy of divorce papers
- Copy of alimony or child support settlement
- Copies of your last three months' bank statements and all accounts, including IRA, 401(k) and savings
- Explanation of any unusual activity, such as large withdrawals or deposits
- Paperwork proving current market value of all stocks, bonds, certificates of deposit and other securities
- Mortgage or rental history, including leases on rental properties
- A list of all addresses for the past seven years
- Records of any bankruptcy proceedings and court judgments against you, along with copies of recorded satisfaction of those judgments
- Credit card information (account numbers, balances, creditor addresses)
- Official statement of monthly child-care payments
- Official statement of health insurance payments
- Proof of enlistment (for VA loans)
Bonus: This expandable folder is also a great place to keep brochures and a notebook to record your conversations with key players and their contact information.
- Two years tax returns and all schedules on file
- Year-to-date profit and loss statements
- A current balance sheet
For milled homes, this salesperson will work through a company office or be an independent dealer. For handcrafted homes, most sales reps work directly out of the company headquarters. You'll likely talk to several companies before making your final decision on a log home producer and package.
When do I need one? You're ready to approach a log home company once you have an idea of what kind of log home interests you and how much you can afford.
Where do I find one? You'll find lots of information on log producers in magazines, at log home shows and on the Internet. You can also meet sales associates at model homes and open houses. When you contact a log home company, you'll be assigned to a representative or directed to an independent authorized dealer.
What should I ask? Find out how long the company has been in business and request customer referrals. Ask if the company employs or partners with a designer, architect or engineer who can help plan your home. Find out what levels of service are available, from just providing the logs (which means you'll need to hire your own construction crew) to building a turnkey log home. If you are talking to an independent representative, ask if that person is a builder or contractor.
How should I prepare? Have an idea what type of log home (milled or handcrafted) you want as well as the basic floorplan and square footage. Giving each company the same specifications will make it easier for you to compare their log home packages. At this point, you should own your land or be certain of the site where you plan to build. And you should have a clear idea of your budget.
For more information on log home pros (such as designers, general contractors and inspectors), read the full article in the May 2005 issue of Log Home Design Ideas.