Cabin Creek Timber Frames ..
Financing Your Timber Frame Home
Have a realistic budget
Although the budget should include the land and
we hope a timber frame structure, one needs to
plan for other items such as a well, septic
system, and a road or grading work. What amenities
will you need right away? Is there is a budget
issue which can you postpone until later? How much
are your building permit and taxes going to be?
How much will your builder's risk and then home
owner's policy be?
Items to consider will be your lighting needs,
home appliances such as a range, refrigerator,
dishwasher, washer, dryer, water heater and such.
What type of cabinetry do you want in your
kitchen, bathrooms, laundry, or closets? What type
of counter tops do you wish to put in?
If you plan to borrow money to finance your
timber frame home, talk with several
lenders about their construction loans. Banks and
Mortgage companies will then be able to give you a
better idea of how much they are willing to loan
you and if you have a realistic budget. They will
also explain to you how and when monies will be
dispersed your house is being built.
Lenders tell us they use what are called
borrower-qualification ratios to determine how
much they will be willing to loan you for your
project. We have been told by the banks in our
area that they can qualify you on a 28% of your
monthly income or on a percent, 36%, of your debt
load. Generally speaking they tend to use the more
restrictive of the two. The following work sheet
will give you a rough idea how much you will be
qualified to borrow. It is important that you
review your finances with each prospective lender
to determine what they will lend, because it can
vary greatly. |
