Log and Timber Home Financing
If you’re planning to pay cash for your new log or timber home, then there is no need to go through much of the information in this section. If you need to finance your home, then this information may be helpful for you. This section also discusses the purchase and the layaway process. Let us know how we can help.
Most home construction projects involve 2 loans – a construction loan and a mortgage. The construction loan provides you the money needed to purchase all the materials and labor to build your new log or timber home. Then, when the house is complete, the construction loan is paid off and it is replaced with a standard mortgage.
In support of building and financing your log or timber home, you will need both types of loans from a financial institution. To make your life a bit easier, we suggest you find a lender that will offer you the construction loan, the land loan and the mortgage in one package. That saves time and money, not to mention a ton of paperwork. Barna Log Homes of Pennsylvania works with lenders who will support your construction loan, your land loan and your standard mortgage in one closing.
Here are some important things to know about construction loans:
- The bank gives you the construction loan in several payments (called draws) throughout your home building project.
- A draw schedule is a list of all the work that must be completed before the next draw is issued from the bank.
- You will make monthly payments on the construction loan throughout the project. The payments are for interest on the outstanding balance only.
- Occasionally, a bank inspector or appraiser may visit your job site to confirm that the necessary work has been completed so the next draw can be issued.
It’s important that you, your builder and your banker are in agreement with the draw schedule. The work that’s being done at each phase of the project should lead to the bank releasing each draw payment. Be sure that the draw schedule matches up well with your cost estimate so that each draw payment covers the work needing to be done.
As mentioned, we work with several lenders that are familiar with log and timber homes. If you would like to bring your own lender to the table when purchasing a home from us, we recommend that the lender is familiar with log home construction.
Log/Timber Homes and Appraisals
When it comes to getting the loan you need for your home, you need to ensure that the bank understands the log and timber home appraisal. Should the institution not understand the log or timber home value or the market, it could cause the loan value that you are looking for to be less than what is required. Bottom line is that a low appraisal can break a loan. Save yourself some time and frustration and be sure your lender and your appraiser know log or timber homes.
Ordering Your Jim Barna Log or Timber Home
We will do our best to make ordering your Jim Barna Log or Timber Home as easy as possible. Please review the following information and if you have any questions, please give us a call at (866) 438-5194.
The ordering process starts when you sign either the Purchase Agreement or a Layaway Agreement. Call or email us for a copy of either agreement and we will get it to you immediately.
Log or Timber Home Package Purchase Agreement:
- Complete the Purchase Agreement form with the distributor. Sign the form, keeping a copy for your records.
- Provide a deposit of at least 10% of the Total System Price.
- Delivery must take place within 12 months of the signing of the Purchase Agreement.
- Provide a 40% progress payment at least 21 working days before delivery. At this point there will be a 50% balance to be paid.
- When the package is delivered, the remaining 50% balance is to be paid and your log or timber home package is ready to unload.
Log or Timber Home Package Layaway Plan Agreement:
If you know you want to purchase a log or timber home, and are ready to lock in the purchase price, our Layaway Plan may be the best solution for you. Here’s how our Layaway Plan works:
- Complete the Layaway Agreement.
- Send an initial investment of at least $2000.00 and today’s prices are locked in for 24 months
- After the initial investment deposit, 10% of the total package price will need to be paid over the next 24 months. Therefore, the remaining balance (Total Package Price times 10% minus the initial investment)is divided into 24 monthly investments you make at no interest.
- If you are sure that you are going to build a Jim Barna Log and Timber Home and you’re not sure which home plan you’ll want, you can also freeze a blanket amount that is price protected for 24 months.
- You can make modifications to your plan throughout the layaway period.
- Your layaway investment is held in a financially secure escrow account and fully credited against your log home package price.
The importance of this program to you as a future log or timber home owner is that log and timber home prices tend to increase by up to 5-7% each year. Use of our no risk, no interest, Layaway Plan for 24 months could save you a substantial amount of money in the future.