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Log Home Mortgage Loans
Anyone know why mortgage lenders do not like log homes? Log homes are stronger and has better insulation.
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This discussion was modified 1 year, 11 months ago by
Gustan Cho.
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This discussion was modified 1 year, 11 months ago by
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1 Reply
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When it comes to obtaining a mortgage for a log home, there are some unique considerations compared to a traditional stick-built home. Here are some key points about log home mortgage loans:
Lender Requirements: Many mainstream lenders like banks and credit unions do offer mortgage financing for log homes, but they may have stricter guidelines and requirements. Log homes are often considered unique properties, so lenders want to ensure they meet certain construction standards and can be easily resold if necessary.
Construction Standards: Lenders typically require that the log home be built to specific codes and standards, such as those set by the Log Homes Council or the International Code Council. The logs used must meet certain grading and milling requirements. The foundation, roof, and other structural elements need to be properly engineered.
Appraisal Process: Finding comparable properties for appraisal purposes can be challenging, especially in areas with few log homes. Lenders may require the appraiser to have specific log home appraisal experience or certifications. The appraiser will carefully evaluate the log home’s construction quality, condition, and any unique features.
Down Payment: Due to the perceived higher risk, some lenders may require a larger down payment for a log home mortgage, such as 20% or more. Excellent credit scores and low debt-to-income ratios can potentially offset some of the increased down payment requirements.
Specialized Lenders: There are also specialized log home lenders and lending programs designed specifically for this type of property. These lenders have extensive experience with log home construction and may have more flexible underwriting guidelines. It’s important to work with a lender experienced in log home mortgages from the start. Being prepared with documentation on the home’s construction standards, providing detailed specs, and potentially using a specialized log home appraisal can help smooth the financing process.