The Log Blog by Appalachian Log Structures

How To Compare Log Home Packages

Posted on Fri, Jul 15, 2016 @ 12:29 PM

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  If you’ve done any research at all comparing log    home companies one of the first things you realized is   that they all offer different types of packages or    materials. When trying to compare “apples to apples”  you soon learn that it is a virtually impossible task  since the material packages are different as well as    the quality and type of materials.

Some examples:

  • Log wall material is pre-cut or linear foot?  To what extent is the log wall "pre-cut"?
  • Roof system - 2x convention frame, pre-manufactured truss or heavy timber?
  • Thickness of log, nominal or actual?
  • 2nd floor system - 2x, conventional frame, pre-manufactures truss or heavy timber.
  • Quality of windows/doors – wood, vinyl or clad?
  • Quality of sealants/fasteners?
  • Written warranty against wood digesting insects and decay?
  • Engineered for settling?

Assuming that each manufacturer offers the same products is incorrect. It is not uncommon to discover that you have requested pricing from a producer that supplies only log and beam materials that are supplied to you in random length and pricing from another that includes materials that are extensively pre-cut and ready to assemble and supply materials to complete a dried-in structural shell. With the pricing between the two log home producers being several thousands of dollars apart, we often find that folks think the lower priced estimate is better – until they discover the difference. Sometime folks don’t “discover” the difference until it is too late!  It's best to remember to compare MATERIAL LISTS before you compare pricing.

When asking log home producers to provide an estimate for a certain floor plan it will be in your best interest to also provide the list of materials you would like included as well as the type and quality of materials you are expecting. This will get you as close as possible to that “apples to apples” comparison you are looking for.

To help you along, here is our Request for Estimate Checklist. In addition our Packages and Pricing flyer is linked so you may see both the material list and pricing for our pre-cut and random-length materials. For more detailed information please call on your local Independent Log Home Sales Consultant. They are a GREAT resource for you to use throughout your log home building project.

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Help Your Log Home Builder Help YOU!

Posted on Fri, Jul 8, 2016 @ 09:30 AM

Here is an interesting article written by an experienced log home builder, Mr. Dan Mitchell and published in Log Home Living Magazine recently.  It offers some good insight and advice when working with the builder of your dream log home.  

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If there’s one thing my 30 years as a log home builder has taught me it’s that the average log home buyer doesn’t always understand his or her role in the construction process. Nor do they fully understand the builder’s role.

By Dan Mitchell

To help, I’ve devised an analogy that’s easy for most people to understand: sports.

You, the log home buyer, are the team owner. You select the players that will perform the best within your salary cap, aka, your budget.

At the end of the day, it’s your money that’s funding this endeavor, and it’s you who will live with the results. Choose wisely.

As the team owner, you’re responsible for hiring the head coach — that’s the builder. His role is to execute your vision, manage the players (subcontractors) in the field and provide feedback on how those players are performing, as well as progress as it’s made.

Yes, your coach/builder reports to you, but for him to be truly effective and build your dream log home, there are a few things you can do to help your builder help you.

And it starts with complete honesty and transparency in the following areas:

Budget

Establish a solid budget, and convey the true number to your builder. To use our analogy, if a coach doesn’t know what each player’s worth is, he can’t manage the members of the team or give direction.

A reputable builder is not out to spend all your money; he does, however, need a detailed breakdown of how much of your budget you want to allocate for each area of the home.

Expectations

Construction is not a perfect process, and in the field, there will be road bumps that impact progress. If you expect that everything will go flawlessly, you are setting up your builder for failure and yourself for frustration. A dose of realism will go a long way toward making the finished home everything you want it to be.

Vision

Builders are not mind readers. Their job is to listen to you and take care of the tasks at hand. It’s vital you have a clear vision of the finished product and convey it to your builder. The more clearly you express your vision, the better he’ll perform. Provide photos or illustrated examples.

If there are certain finishing materials you prefer, supply him with product and serial numbers. If you put the builder in the position of having to guess what you want, there’s bound to be miscommunication. But remember, part of his job is to manage your vision against your budget, so if he offers frugal alternatives, consider them. This goes back to having realistic expectations.

Input

A builder worth his salt wants your input, so make yourself available. Visit the site, ask questions and work with him to manage the schedule. When your builder asks you to make a decision, don’t procrastinate. He will work at your pace, so if you want to keep the process moving along, be responsive.

Communication

If you’re building this home with a spouse or significant other, you’ve got to be on the same page before talking with your builder. Builders aren’t marriage counselors, so if you can’t find common ground with your spouse on some aspects, don’t put him in a position to choose sides.

It won’t be good for your project or your relationship. Assign one and only one of you to be the point of contact with your builder.

Respect

Your builder wants to do a great job for you. It’s easy to point out problem areas or come down on him if your schedule veers off course; but don’t forget to praise him if he completes a phase early, solves a tough problem onsite or finds unexpected cost savings. A periodic morale booster when things go right will encourage him and his team to do an even better job for you.

Trust

For all the involvement you should have in the construction of your log home, don’t be an owner that tries to coach from the sidelines. When it comes to the team of subcontractors, let your builder do the job you hired him to do.

If you don’t, you may introduce mistakes that could cost you thousands of dollars to fix. You’ve entrusted what is likely the most complex and expensive project of your life in your builder’s hands. Let him call the plays.

Dan Mitchell owns Eagle CDI in Tennessee and has built close to 100 log homes in his 30-year career. He’s the Knoxville Home Builders Association 2015 Builder of the Year.

Tips for Choosing Your Dream Log Home Builder

Posted on Thu, Jun 23, 2016 @ 11:00 AM

Finding the right building professional to turn your dream of log home living into reality will take time and research.

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When you buy pre-cut log package from Appalachian Log Structures, a Log & Timber Homes Council member, they will provide graded logs and timbers, as well as construction drawings,a construction manual and 8-hours of technical assistance, to help builders become familiar with their building system.

Although a few log home producers offer construction services, the vast majority of council members like Appalachian Log Structures leave construction to independent builders and contractors. It’s up to these individuals to turn that log home package into a comfortable and well-crafted home. Choosing the right professional for this job can be a daunting task. But that’s why the Log Homes Council created this Buyer’s Guide, to help consumers make educated decisions when making their dream home a reality.

Identify Your Role
Before you can move farther along The Perfect Path to Your Dream Home, you will need to identify your role in this construction process. This decision will affect a host of issues, including your budget. With the downturn in the housing market, the cost of labor accounts for three-fifths or 60% of the total cost to build, according to a recent reports from the National Association of Home Builders. You may be able to save some of this cost by doing some of the work yourself. Essentially you have three options, all discussed here at more length:

Professionally Built
When choosing this path, you will work with Appalachian Log Structures, a Log Home Council member, and a builder/contractor or a builder/dealer to finalize the design of the home. Then the manufacturer cuts the log home package while the builder performs infrastructure improvements, including installing foundation, driveway, water, sewer or septic and more. Once the log home package arrives and is inventoried, construction begins. When the home is finished, the builder obtains a certification of occupancy from the local building inspector and you move in. This is the easiest path and it’s often recommended if you want to have a home completed on time and on budget.

Owner-Contractor
This is a more difficult path. As the owner-contractor (general contractor or GC), you will be responsible for hiring talent to do the work. However, this is not without risks or long hours. In fact, it’s a full-time gig.

You will have to prepare all the specifications for each trade (specifications are the instructions for what materials to use and description of the job they are expected to perform), locate subcontractors, obtain bids, prepare cost estimate and budget, maintain a comprehensive construction schedule and finalize all contracts. (Hint: Have an attorney familiar with construction review all contracts before signing.)

You will also to educate yourself on all local building codes, insurance rules, safety regulations, plus attend to a raft of other details. This includes obtaining building permits, dealing with building inspectors and your lender, ordering and inventorying building materials and managing the job site.

Another duty that you will have to reluctantly perform as a GC is make mistakes. It could be scheduling errors, building materials broken or overlooked, a bad choice in a subcontractor or any number of other drop-the-ball blunders. Even professionals make mistakes, from time to time. But if you are new to construction, it’s nearly guaranteed you will make far more. This will cost you more in time and money.

Owner-Builder
This is the most difficult path. Think of it as several full-time gigs. This means you will likely be working days, nights and weekends. You will be responsible for everything the general contractor is responsible for, plus you will perform much of the labor yourself.

Work for Your Builder
Yet another option is to find a builder who is willing to be flexible and allow you to perform some of the labor yourself. If you have some home improvement skills, you can tackle any number of construction tasks and eliminate the cost of that labor. Scores of log home buyers have saved on thieir building budgets by installing landscaping, staining logs, cleaning up the jobsite and more.

Lender May Decide For You
Unless you just arrived here in a hot tub time machine, you already know that lenders and banks are much more conservative. In this new lending environment, they may require a veteran log builder construct your home. Explore your options with your lender.

Which Role is Right for You?
How much time do you have in your life for this project? Reviewing your schedules can bring some clarity to the decision of whether to tackle this job or hire a pro.

Budget for A Pro
Even if you are going to tackle some of the construction yourself, you should budget the project as if you were having it turnkeyed by a builder. This creates a safety net that ensures your project will get done. If you get hurt on the job and can’t finish the project, you will have enough to bring in a professional to finish the job.

Shopping for Builder/Contractor
The company you have chosen to cut your log package will likely have lists of builders they have done business with before. You can also contact building associations in your area. Select several to consider and evaluate each carefully.

Check References & Rapport
Review each company’s standing in the building community. Also weigh their communication skills and whether you have good rapport. After all, you will be spending anywhere from a few months to a year interacting. You want a good working relationship.

Tour Completed Homes
Visit log homes the builder has built before. Closely inspect crafting and sealing at corners and around doors and windows. A three- to five-year-old home is probably the best example of a builder’s art.

Check Official Channels
Contact the local contractors’ board or similar state or regional authority, to see if the individual is in good standing. Make sure the builder is licensed and bonded. Check online with your state’s Attorney General’s office to see if the builder has been involved with litigation or judgments in the past. In today’s litigious society, don’t expect a spotless record in a career spanning decades. But multiple incidents in a shorter time frame can be an alarm bell.

Trust Your Intuition
Interview each individual, to get a feel for their communication style and customer service. Talk with their past clients to see how they performed in real world situations. It’s likely that at least one individual will click with you.

When you are ready to begin the process of building your dream log cabin home be sure to look up your nearest Log Home Building Consultant and schedule a meeting with them at your job site.  We're excited to assist you and get you in your log home as soon as possible.

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This article was taken in part from the Log Homes Council web site www.loghomes.org.

8 Strategies for Reducing Log Home Construction Costs

Posted on Fri, Jun 3, 2016 @ 11:30 AM

 

custom log home constructionIn addition to being a motivation for much of what we do, money is energy. It enables us to go places and do things, including taking care of our families or buying and building a new home. Most of us have a finite amount of this energy, mainly through long years of hard work, patient savings and perhaps the sale of a conventional home.

Now you’re ready to use all that energy to create your dream log home. But is it enough? Where can you conserve? That’s why the Log &Timber Homes Council created this Buyer’s Guide, to help consumers make wise choices on the Perfect Path to Your Dream Home.

Begin by sitting down with a lender who specializes in log homes to discuss financing options. By being pre-qualified by your lender, you will how know exactly much energy you have to work with on your dream log cabin home.

How Much Do Professional Builders Spend?
What do the pros typically spend on new home construction? Are there any ballpark figures out there that can help you see if anything is out of line? Indeed there is.

The total cost of an average new home in the U.S. breaks down thusly, according to the 2004 Cost of Doing Business Study: The Business of Building, published by BuilderBooks.com, a division of the National Association of Home Builders (NAHB).
• Finished lot costs 20-25% of the total selling price, with half of that reflecting infrastructure costs, such as utilities and driveway.
• Building materials, everything from foundation and flooring, to porches and roofs, cost 25-30% of the total.
• Onsite labor costs 20-25%.
• General overhead is about 6%.
• Financing costs are about 2%.

Thinking of being your own general contractor to save money? Small-volume builders (constructing an average 4.9 homes a year) who built exclusively on their clients’ land had average gross profit margin of 18.9% and an average net profit of 4.8%, according to the study.

If you decide to build your own log home, you won’t earn all of that 4.8%. You will pay far more for labor, since subcontractors will see you as a one-time job and price their services accordingly. You will also pay more for specialty tools needed in log construction. Professional log home builders pro-rate their tools costs over several jobs. You will also pay more for insurance, since insurance companies will see you as a greater risk. It’s also almost guaranteed you will make costly mistakes that pros won’t, which will cost you more in time, materials and labor.

Value Engineering
Want to do more with less? This is called value engineering. Your log home producer and builder have an assortment of cost cutting tricks. Use their expertise. Simply communicate that you need to save money on your budget. They can provide all kinds of helpful advice, including:

1. Reducing Square Footage
One way to dramtically reduce costs is to just reduce the square footage of the entire home. Think small and cozy to slash costs. Another smart strategy is to build upward with a two-story design rather than outward, such as with a ranch design.

2. Choosing a Stock Design
Custom designs cost more in design time, materials and labor. Most log home manufacturers have dozens of stock plans that they have built time and time again. Many errors have been eliminated in these designs, which makes them go up smoothly, saving you time and money.

3. Reducing Lineal Feet of Logs
Adding decorative stone, cedar shake or stucco can actually accent logs and reduce costs.

4. Opt for a Simple Roof System
The roof is one of the most expensive material and labor line items in your budget. This is why the simpler the roof system, the less expensive it will be. The most inexpensive roof is a simple, single ridgeline with a shallow pitch. More complicated roof systems, called hips and valleys with a steeper pitch, are more visually interesting. But they are also a lot more expensive.

5. Use Drywall On Interior
Pine paneling on the interior of your partition walls looks great. However, it’s roughly twice the cost of drywall—and cedar paneling is even more expensive than pine.

6. More Modest Kitchen
If your marriage can take the heat, down grade your kitchen appliances and amenities. Almost everything in a kitchen can be upgraded later, including flooring, appliances and cabinetry.

7. Don’t Take A Bath on Your Bath
Much like kitchens, bathrooms have a variety of materials that can be upgraded later. If you want that jetted tub in the master bath but can’t afford it now, specify a soaking tub of the same size from the same manufacturer. Swapping it out in the future will be a snap.

8. Avoid Change Orders
Last minute changes in design or materials are called “change orders” and they can quickly take a toll on your budget. Save these for correcting any serious errors.

For more insight in to cost saving ideas when building your dream log home, be sure to contact your Local Log Home Building Consultant for an appointment and to visit their model home.  We're all here to assist you.

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10 Easy Ways to Save Energy and "Green" your Log Home

Posted on Thu, May 19, 2016 @ 11:30 AM

10 Simple Ways to Save Energy and "Green" your Log Home

custom log homeAdopting a “green” philosophy is easier than you think and it does not require wind turbines, solar panels or wearing extra sweaters in January. Here are 10 conventional, easy to implement suggestions from the Log & Timber Homes Council on ways to reduce energy costs, increase comfort and make your dream log home a little greener.

 Passive Solar

Situate the home to take advantage of the sun. In colder climates, a southern exposure for the family room and kitchen is ideal. Rely on existing trees to lower energy costs. When clearing the site for construction, maintain fir trees as a barrier along the cold and windier north and west elevations. Plant or preserve existing deciduous trees along the south and east elevations. The leaves will provide shade in summer and in the winter; the bare trees will let in plenty of sunlight and warmth.

Energy  Star 

ENERGY STAR© is a government-backed program helping businesses and consumers protect the environment through greater energy efficiency. Look for the Energy Star label and rating on products you buy for your home.  The distinctive yellow label gives consumers guidelines for a wide range of components and savings can be significant. When compared to single pane windows, Energy Star rated low-e glass with solar shading, cut energy bills by $110 to $400 while increasing comfort, protecting furniture from sun damage and reducing condensation.

 The Kitchen

 Again, ENERGY STAR rated appliances such as refrigerators; dishwashers and vent fans incorporate advanced technologies that use 10% to 50% less energy and water than standard models -- more than making up for the slightly higher costs of these products.

Tip – old refrigerators are energy hogs; so keeping that extra fridge to occasionally store beverages and extra food is wasteful.

 Lighting

 Compact Fluorescents cut energy by 70 percent. Wherever possible install fluorescent fixtures and switch lamps to compact fluorescent bulbs. These bulbs have been improved in terms of ambient color, but if you still have trouble getting used compact fluorescents, start with utility areas such as the laundry and basement. Combine compact fluorescents with incandescents in bedrooms and living areas.  In addition, automatic lighting controls, ranging from outdoor light fixtures with built-in photo sensors to motion detectors to whole-house programmable controls eliminate waste.

 Heat Pump Systems

 For climates with moderate heating and cooling needs, heat pumps offer an energy-efficient alternative to furnaces and air conditioners. During the heating season, heat pumps take advantage of the outdoor “heat” and move it into the home.  During warm weather, the process is reversed. Because they move rather than generate heat, heat pumps can deliver up to four times the amount of energy they consume. In moderate climates, air source heat pumps use the ambient air. In severe climates, geo-thermal heat pumps, which are more costly, take advantage of the heat below the ground, which remains above 50 degrees.

 Hot Water

 Consider an on-demand heating system that eliminates having to keep an 80 or so gallon tank of water warm around the clock.  In addition to natural gas or propane, units that have to be vented or installed on an outside wall, on demand hot water heating systems are available in electric models that can be installed anywhere.  Additionally, solar water heating can be considered.

 Indoor Air Quality

 Consider incorporating a HEPA filter to the heating system. A HEPA (High- Efficiency Particulate Air) filtration system, removes up to 99.97% of small particles - pollutants that standard disposable filters simply do not touch.

 Ceiling Fans

 Ceiling fan and light units circulate warm air in the winter and make occupants feel cooler in the summer. Look for ENERGY STAR rated models, as they are 50 percent more efficient than conventional units. This saves $15-$20 per year on utility bills to say nothing of the air conditioning and heating savings gained.

Tip: In the summer, use the ceiling fan in the counter-clockwise direction to create a wind-chill effect. In the winter, reverse the motor and operate the fan at low speed in the clockwise direction to produce a gentle updraft, which forces warm air near the ceiling down into the occupied space.

Keep these tips in mind when designing your log home and be sure to contact your Local Log Home Building Consultant for more insights in to the design of your dream log cabin.

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This article was taken in part from the article "Today's Log Homes Go Green" by the Log Homes Council.

Financing Your Log Home - Part 3 of 3

Posted on Thu, May 12, 2016 @ 11:46 AM

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 This 3-part series on Financing your Dream Log Home was co-written by Greg Ebersole, Mortgage Loan Officer/BB&T  and Donald Parsons, Appalachian Log Structures.  Mr. Ebersole has over 16 years in the Mortgage Lending field and specializes in Log Home financing.   Mr. Parsons has spent the last 23 years assisting several hundred satisfied homeowners realize their dream log homes with Appalachian Log Structures.

Part 3:
What to expect at loan closing and how to get a good appraisal on your custom log home

According to BB&T's Mr. Ebersole “much of the application process can be handled electronically including signing the documentation electronically vs. signing hard copies.  During the application process the lender will ask for documentation to support your income (W-2’s paystubs, tax returns) and other documentation needed for the approval process based on each client’s situation.”  Additionally, Mr. Parsons add that “this is part of the loan process that can take a lot of time, research and patience.  Sometimes additional documents are needed besides the ones listed above or on a list that may be provided from the lending institution.  Don’t despair, this happens more frequently than not.  Be prepared and have patience while the loan is closing and be quick in responding with the information being asked for”.

A loan will typically take 45-60 days to close from the time the application and all documentation is submitted.  There have been instances where the process took longer  than 60 days, but this is where patience pays off.  Parsons suggests to “ask to be kept in the loop and don’t  be shy asking about the status of the loan if the process is taking longer than 60 days.  Your mortgage councilor should be able to keep you up to date on the progress.”

One of the biggest unknowns in the loan process is what the appraised value of your finished log home will be based on the independent appraiser’s report.  “What is required from the appraisal varies from lender to lender in terms of requirement of log home comparable sales” says Mr. Ebersole.  “Many lenders will ask to see 1-3 comparable log home sales to determine the value of the log home.  Log homes typically do not resell as frequently as stick-built homes so finding log homes sales can be a challenge.”   In these cases, the appraiser will seek to find 3 homes that have sold in the past 6-12 months that are similar in square footage, bedroom & bath count and acreage.  The appraiser will also take into consideration the upgrades/amenities going into the home based on the specs that are provided to the appraiser.  If you are working with a lender and/or appraiser that is un-familiar with log homes, send them to the Log and Timber Home’s Council web page (www.loghomes.org)  where they will find a booklet in .pdf format that describes the process and considerations an appraiser should take when appraising a log home.  The booklet was developed in part by Marshall & Swift  (which provides the building cost data necessary for real estate cost valuations and is widely considered the authority on the cost approach) and the Log and Timber Homes Council.  In the past it has assisted many homeowners, appraisers, banks and other financial institutions with getting the proper appraisal on log homes.

When the appraisal is finalized and the loan is closed, you are a step closer to breaking ground and getting your dream log home started.  Although this entire process (from getting your FICO and Credit Score to Loan Application/Appraisal/Closing) may take 3 to 6 months, it’s important that during this time that you are designing a home that will fit the budget you’ve set aside.  Sharing your budget with both your Loan Officer and Log Home Manufacturer from the beginning will help you stay on target throughout the building process.  Although some folks think it unwise to share what their budget is, “it’s the ones that don’t share that typically wind up overextending themselves” says Donald.  “The one’s that do share their budget are trusting that the lender, the builder and the log home company are doing their best to guide you in making the right decisions on the size, design and finish of the home so you come in on budget.  None of us get a good reference if we don’t!”

When you’re ready to start the financing process of your dream log home, please keep Greg Ebersole and BB&T in mind (Lending in AL, DC, DE, FL, GA, IN, KY, MD, NC, NJ, OH, PA, SC, TN, TX, VA & WV).  Although you may have a local BB&T branch in your area, that branch may not have the experience in log home lending that Greg does.  To shorten the loan application time, consider calling Greg direct to begin with (717-449-0043)To help you save money on the Financing process, BB&T has a great offer for you.  CLICK HERE to learn more about saving up to a $1000 on Lending Fees with BB&T.

And when you are searching to partner with a quality log home manufacturer, give your local Appalachian Log Structures Building Consultant a call or visit one of the 15+ model home locations.  You’ll find knowledgeable, experienced and helpful consultants ready to assist you with your dream log home and make it become a reality.

Financing Your Log Home - Part 2 of 3

Posted on Thu, May 5, 2016 @ 11:45 AM

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This 3-part series on Financing your Dream Log Home was co-written by Greg Ebersole, Mortgage Loan Officer/BB&T  and Donald Parsons, Appalachian Log Structures.  Mr. Ebersole has over 16 years in the Mortgage Lending field and specializes in Log Home financing.   Mr. Parsons has spent the last 23 years assisting several hundred satisfied homeowners realize their dream log homes with Appalachian Log Structures.

Part 2:
Finding the right Lending Institution for your Dream Log Home and Starting the floorplan process

A key step in having a smooth loan process is finding a loan officer and lender that are familiar with the nuances of financing a log home project.  Many lenders are not familiar with log homes and may only offer adjustable rates that they hold in-house vs. having a 30 year fixed term.  You may find log home financing at places like:

  • BB&T/Greg Ebersole – 16 years’ experience in log home construction financing
  • Credit Unions
  • Local Bank
  • Using your own funds – borrowing against your equity accounts

When searching for a “Log Friendly” lending institutions Mr. Ebersole “recommends asking how many log homes the loan officer and lender have financed in the past 2-3 years.”   Here are some key differences in financing a log home project:

  • Release pre-cutting funds - Some lender’s will allow for releasing monies for pre-cutting of the log home building materials while many other’s will not.  The amount that can be released is typically based on how much land equity the client has at the time of closing.
  • Pay log package @ delivery - A key uniqueness with a log home financing is paying for the log home package at delivery of the product. The log package can be a large percentage of the overall construction costs and many lenders are not comfortable paying for the logs at delivery.  The lender may require the logs to be completely stacked before payment.

Part of the documentation process needed to apply for a construction loan is having finalized floor plans, signed material contract & specs with the log home company and a signed construction contract & specs with the builder.  These finalized items are needed in order to structure the loan amount and order the appraisal.  Changes to these items after submitting the loan for approval can cause delays in the loan process so it is important to have costs finalized before applying for the loan.

Mr. Parsons explains that “Most log home companies have a fee for drawing a set of modified or custom floor plans.  While these fees are usually applied as a credit to the log home package when the log home order is placed, you should expect a small investment upfront to get the plans going.  Depending on the size and complexity of the plans Mr. Parsons says “you can expect to invest anywhere between $1200 and $3000 or more for a quality set of preliminary or construction set of plans”.  These plans are necessary to present to contractors and sub-contractors to collect bids for the construction process.  Contractors including graders digging the footings for your foundation to electrical, plumbing, HVAC installers and all of the suppliers of your finish materials (floor coverings, cabinets, counter tops, electrical fixtures, plumbing fixtures, etc.) will need to review these plans to come up with an estimated finish cost.  CLICK HERE to view a sample Cost Estimating Worksheet that a builder/contractor would follow to provide a turn-key bid.  It’s quite involved but necessary in order to determine that the build price meets your expected budgeted loan amount.

To help you save money on the Financing process, BB&T has a great offer for you.  CLICK HERE to learn more about saving up to a $1000 on Lending Fees with BB&T.

Be sure to check back next week to view Part 3, the last installment, of this Financing Series.

Financing Your Log Home - Part 1 of 3

Posted on Thu, Apr 28, 2016 @ 11:44 AM

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This 3-part series on Financing your Dream Log Home was co-written by Greg Ebersole, Mortgage Loan Officer/BB&T  and Donald Parsons, Appalachian Log Structures.  Mr. Ebersole has over 16 years in the Mortgage Lending field and specializes in Log Home financing.   Mr. Parsons has spent the last 23 years assisting several hundred satisfied homeowners realize their dream log homes with Appalachian Log Structures.

In recent years, the financing of new custom homes has transformed due to changes in the marketplace, increased government regulations and lower interest rates.  In order to assist in the navigation of these new financing rules and regulations this 3-part article was developed to  help guide people on the path to realizing their dream log home. 

Part 1 will focus on the individuals FICO score, Credit Report and Pre-qualification process.  You will learn what they mean in the overall development of your loan amount and possible interest rate both in the construction phase of the building project as well as in permanent financing.  You can prepare yourself with most of this knowledge before going to the lender so you have a better idea of just where you stand financially.

Part 2 will discuss how to search for a “log friendly” lending institution and starting the floor plan drawing process.   Although some banks or mortgage companies make construction loans on conventional built homes, there are some unique features of log home lending that not all institutions may understand or agree to.  You’ll also discover why it’s important to get your floor plans started now!

Part 3 will cover what to expect at loan closing as well as getting a good appraisal on your project.

 

Part 1:
FICO scores, Credit Reports and Pre-Qualification – OH MY!

What is a FICO Score?  A FICO score is a credit score developed by FICO, a company that specializes in what’s known as “predictive analytics,” which means they take information and analyze it to predict what’s likely to happen.

In the case of credit scores, FICO takes credit information and uses it to create scores that help lenders predict behavior, such as how likely someone is to pay their bills on time (or not), or whether they are able to handle a larger credit line. Scores developed by FICO can also be used to forecast which accounts are most likely to end up included in bankruptcy, or which ones are likely to be most profitable. And credit-based insurance scores, which they also create, are used to help insurance companies identify which customers are least likely to file claims.

What Goes Into FICO Scores?

The FICO score range is 300 – 850, with the higher number representing less risk to the lender or insurer. Consumers with high FICO scores (usually around 760 or higher, though every lender is different) are likely to get the best rates when they borrow, as well as the best discounts on insurance.

There is a popular FICO score chart that describes the main factors that go into these scores:

Payment History (35%)
Debt/Amounts Owed (30%)
Age of credit history (15%)
New credit/inquiries (10%)
Mix of accounts/types of credit (10%)

All of these factors are considered in other credit score models, so it’s safe to say that if you have a strong FICO score you likely have a good score with other models as well. When you check your credit score, don’t get too hung up on the specific number. Instead, focus on what areas of your credit are strong and which ones you might want to work on. 

What is a Credit Score? A credit score is a three digit number calculated from your data-rich credit report and is one factor used by lenders to determine your creditworthiness for a mortgage, loan or credit card. Your score can affect whether or not you are approved as well as what interest rate you are charged.

Mr. Ebersole says “Construction lending typically has higher credit score requirements than purchasing or refinancing an existing home.  Knowing your credit scores can help when having your initial call with a mortgage lender.  Some credit card companies such as Discover now provide you a credit score from one of the credit reporting agencies.  Please note that your lender will pull all 3 credit bureau’s (Equifax, Experian & TransUnion) and use the middle score (drop the highest & lowest scores) for determining the loan program available as well as the rates.  You can also request credit scores from places like freecreditreport.com.  However, I caution clients in using these scores as the assumption for scores when trying to secure a mortgage.  If you only get 1 of the 3 credit scores you will not know if that score is your highest, lowest or middle score.  There are over 200 different scoring matrixes used to determine scores based on the use of the credit inquiry.  My experience has shown that “free” credit report scores are typically 10-40 points higher than when a lender pulls the credit report.  If you are not aware of any late payments, charge-offs, collections or judgements in the past 5 years your credit scores are likely to be over 700.”

Once you understand what goes in to both a FICO and Credit Score and how important they are in the process, you can then begin the pre-qualification stage.  Please keep in mind that pre-qualification does not necessarily mean this is what a financial institution will lend, only a quick (un-verified) overview of your current income and liabilities to determine a possible loan amount.  Mr. Ebersole explains that “the first step in the financing process will be completing a pre-qualification.   To prequalify the lender will need basic information such as your full name, address, date of birth and social security number.  This information will be used to acquire a credit report to use in evaluating your current debts as noted in the credit report.  Additionally, the lender will ask for income information.  Based on the debts from the credit report and income provided the lender will give you a pre-qualification noting the mortgage loan amount you can qualify for at this time.  This is helpful information to use as you plan your search for land (if not already owned) and planning of your loan home.  Another consideration in the pre-qualification process will be the amount of monies available for down payment and closing costs.  The equity in your land can go towards your down payment depending on the appraisal that comes back during the approval process.”   CLICK HERE to start the pre-qualifying process with BB&T today!  

To help you save money on the Financing process, BB&T has a great offer for you.  CLICK HERE to learn more about saving up to a $1000 on Lending Fees with BB&T.

Be sure to check back next week to view Part 2 of this Financing Series.

16 Secrets of Affordable Log Home Designs

Posted on Thu, Apr 21, 2016 @ 09:30 AM

affordable log home
You Can Create Your Dream Home for Less!

It’s a rare these days to hear the phrase “money is no object.” No matter what your net worth, chances are you’re interested in making smart investments—and getting the biggest bang for your buck. Building a log home is no exception.

Designers and builders can offer dozens of ways to cut costs. This can be called value engineering. Working with the pros, like Appalachian Log Structures, that belong to the NAHB's Log & Timber Homes Council will help you decide where you want to save money—and where you shouldn’t skimp. (Opting for cheaper windows and insulation isn’t usually recommended.) Here are 16 tips from Appalachian Log Structures and the Log & Timber Homes Council.

1. Use Proven Design
Instead of a custom design, opt for a stock plan from a log home producer’s catalog. Stock designs have been built many times before, so construction errors have been eliminated. When you opt for a stock plan, you’re getting all engineered and cost efficiencies built into that log home design. This strategy will save you both time and money.

2. Think Rectangular
Whether stock or custom, a rectangular design is the most economical shape to build. Add more than four corners and you’ll add more costs. For example, it takes 18 feet of logs to create a single Traditional corner with an eight-foot wall height. More corners, equals more coin.

3. Open Flexible Floor Plan
How much house do you really need? Keep square footage down with an open floor plan that eliminates unnecessary hallways. Look for innovative ways to use traditionally wasted space. Our favorite trick: adding a closet or built-in shelves under a staircase.

4. Trim Your Width
Keep your home’s width under 30 feet. Once you go over 30 or 32 feet, you have to beef up your support beams substantially. The longer the logs, the more they cost.

5. Think Long Term
So you’re envisioning a log home, guest house for the in-laws and perhaps some out buildings to house your hobbies and toys? But in this economic climate, you are concerned about affording the full tab? The solution is to plan your construction over several years, which will give you some financial wiggle room. Start by building the log home the first year, followed by the wraparound porch in Year 2 and the garage with breezeway in Year 3. Add out buildings, such as a guesthouse or barn, in subsequent years.

6. Clearing Land 
As much as 35 percent of your budget will go to clearing your home site, excavating a foundation, creating a driveway and installing utilities. These are fixed infrastructure costs that simply can’t be avoided. However, you can save on this portion of the work by performing some of it yourself, or hiring workers and supervising their efforts. Get started by clearing the land. Save any materials you can re-purpose during construction, as well as saving lumber for firewood.

7. Full Basement
A full basement with roughed-in plumbing and electrical lines is one of the most affordable ways to add extra living space to your log home. If you can afford it another 20% in concrete costs, add 10-foot high sidewalls to add volume to a space that can seem closed in.

8. Stacked Baths
Putting two bathrooms back to back—or above and below in a two-story design—will reduce your plumbing contractors work, which can save you substantially.

9. Mix & Match Exterior Finishes
To save money, you can opt to incorporate a variety of exterior materials such as stone, board and batten, cedar shake and even stucco. These materials can add character to the home and actually accent the logs.

10. Driveway Strategy
From a privacy perspective, locating your home far off the main road may be appealing. But you could save thousands in grading and compacting if you keep the driveway short. You can also delay your driveway installation for a few years. That time allows the soil to settle, so you’ll end up with a more stable driveway with fewer repairs over time.

11. Simple Roof Line 
Keep your roof simple with a single ridgeline instead of “hips and valleys” or multiple roof planes. Extreme angles, such as turrets or an angled prow under an A-frame, cost more in materials and labor.

12. Ceiling Height
If you worship cathedral ceilings, go ahead and enjoy them one in your great room. But keep the ceiling height in other rooms lower (in the 8-foot realm). Not only will you save on construction costs, but lower ceilings make your home easier to heat and cool.

13. Opt for Conventional Roof System
It can be quite expensive to put large, structural timbers with tongue-and-groove decking overhead in the great room. To save money, use a conventional truss or rafter roof system in the attic, with smaller, decorative timbers and non-structural tongue-and-groove decking. You’ll reduce your costs by a third without sacrificing aesthetic appeal.

14. Consider Solar Tubes
If you can afford dramatic skylights, go for it. But also consider solar tubes. They bring in natural light and cut down on installation and materials costs. They also make a great addition to master closets. Bonus: many of these modern money-savers also have venting capabilities for a breath of fresh air.

15. Hunt for Bargains on Appliances
If you’re craving an epicurean range but can’t stomach the price, check out “scratch and dent” sales centers run by manufacturers and retailers. New units are usually half price—a sweet savings for a few nicks you’ll hardly notice when it’s installed in a brand new log home.

16. What Hasn’t Worked in the Past? Now’s the Time to Fix It!
Often it’s the little things (extra lighting in the master closet, a quiet exhaust fan in the bathroom, or a computer workstation in the kitchen) that make life easier and more convenient. Think about what hasn’t worked in your past homes—along with how and where you want to spend time in your new one. Then invest a little more money in the spaces that mean the most to you.

When you're ready to start your affordable log home please contact your Local Log Home Building Consultant to help you with these and other GREAT money saving ideas in the design of your dream log home.

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Parts of this article were taken from the Log & Timber Home Council's website www.loghomes.org.

Are Log Home Logs Created Equal?

Posted on Fri, Apr 1, 2016 @ 11:00 AM

Are ALL Log Home Logs Created Equal?

log cabin home log profiles

There are some that think the logs used in log homes are all created equal.  That's why many potential consumers think all logs should all be priced the same.  As with any product, there are differences in quality, thus differences in price.  Let's take a look at a few of these differences.

THICKNESS - Most log home companies will advertise 6", 8" or 10" thick logs.  When you go and actually MEASURE these logs you'll find they are 5.5", 7.5" or 9.5" thick.  Appalachian produces FULL THICKNESS logs for our log cabin homes, thus more wood AND more insulation.

GRADE STAMPED - Know the difference between a graded log and a grade stamped log?  A grade stamped log guarantees that your log home building materials are structurally sound and approved to meet building codes.  Building inspectors will be looking for this stamp on each of your logs to verify that they meet the ASTM specifications.  Many log home companies talk about "graded logs" - BEWARE - these are NOT GRADE STAMPED logs.  Graded could mean a visual grade (not structural) or just that the guy running the mill thinks it looks good so he gave it a good grade.  Quality is the difference - you'll pay less (and get less) with a non-grade stamped log.

SPECIES - Still believe there is one wood species better than the rest?  Do some research and you'll find that besides some color and grain difference they are all about the same.  Think cedar or cypress is impervious to rot/decay or wood digesting insects?  Think again and start doing some research for yourself.  You'll soon discover that these species, just like all the rest of the wood species, need to be protected with preservatives for great looks and longevity.

TREATMENTS - What is the optimum way to protect my log wall?  Research pressure treatment and see why it is the best way to go.  Research Borates and you'll soon learn why we pressure treat with this organic (non-chemical) product.  In the 35+ years we've been providing log home building materials, not one of our homeowners have had to replace/repair any of their pressure treated materials we've provided.

Now that you begin to understand that not all logs are created equal, you'll start to understand some of the differences in QUALITY and pricing.  When creating your dream log home think about the type of products you want surrounding you and your loved ones as well as the quality of materials you plan to use in one of the largest investments you'll be making.

Don't forget to contact your local Log Home Building Consultant  to discover more about our log home building components and how they can save you time and money not only today, but for the lifetime of your log home.

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