Quality Log Homes

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Hold the Shovel!
by Levi Hochstetler

Every now and then we run into folks who approach us for a log home with their foundation already in. Their train of thought is to use their own cash today, put in the basement, and when financing comes through they will buy the package and finish their log home. This way, they reason, it won’t be as long to finish their home once financing comes through.

Problem #1 Good luck getting financing! Banks don’t like to lend on projects already started. This is because how do they know that you paid all the contractors and that there is no lien going against your property. Even if you have proof and know you paid all the contractors, that’s not proof the contractors paid their suppliers. If per chance the mason didn’t pay for the blocks, you might end up with a lien on your property. This could become a cat and mouse scenario where you don’t want to pay them until they release the lien and they won’t release until they have check in hand and it clears the bank. The bank’s solution is to not give you financing until past the statute of limitations, which generally is around 3 months. So you could get stuck with an open foundation for a while.

Problem #2 You put in a foundation large enough for a 2,000 square foot log home. The bank had preapproved a $200,000 loan based on your down payment of $50,000. You finally sell your existing home for $20,000 less than what you were expecting - money you were planning to use as part of your down payment.

Now the bank will only lend you $150,000 with your down payment of $30,000. Suddenly your budget has shrunk from $250,000 to $180,000. The dilemma is, you have a foundation for a 2,000 square foot home and you can only get financing for a 1,500 square foot home!

Problem #3 It reduces your flexibility when designing your log home. You or your designer have a bright idea, or you see something that you would like to incorporate into your plans, but can’t because of the way the foundation is done. Sometimes you can make changes to the foundation, but it would be an added cost. Basically the foundation becomes the tail that wags the dog.

Problem #4 Codes can change over time. What you planned to build today may not be acceptable when you finish the home.

Problem #5 Subfloor decks and open foundation can deteriorate real fast, particularly in the winter. Even when you cover your decks, they are hard to completely seal off and if you do it’s easy to get leaks in them.

Bottom line, get your blueprints and finances secured before you start.