One of the questions we’re asked soon after we get chatting to people is “Can I get a mortgage on a log home?”.

A log home is a significant investment, just like any home, and you’re very likely to need to borrow in order to finance your project.

Several of our clients have successfully got mortgages to help them build their own log homes – in fact one of our clients actually got a discount on their mortgage because their home was so energy efficient!

Other clients have funded their projects from savings, or from selling their existing house. Either approach might need a bridging loan, and you should then be able to take out a new mortgage if necessary, once your home is complete. 

Self build funding is a specialist sector within the overall mortgage industry, and there’s a range of options available. High Street lenders don’t tend to get involved in lending against anything that’s not habitable (such as a building site!). Building societies tend to be more familiar with the whole idea of self build, and several of our clients have tended to use these when they have needed to borrow to finance their projects. You may well find that using a specialist broker will be the easiest approach.

When looking to borrow in order to fund your build, be ready to share as much information as you can on your financial situation and what you think you’ll need to borrow. To do this you’ll need to get your budget estimates in place (including a contingency). You’ll also need a project plan to help work out when you’ll need the funds.

Self build loans come in a range of styles, but the most flexible are often called a “staged release” loan or self build mortgage, and typically you then convert it to a standard mortgage on completion. Unlike when you buy an existing home, when you’re building your own you don’t usually need all the funds in one chunk, but over a period of time as the project progresses. You’ll therefore need to have a clear project plan identifying how much you’ll need and at what stage – ideally with funding paid in advance rather than in arrears.

Once your home is complete, or if you’re looking to buy an existing log cabin home, then you’ll need an ordinary mortgage. However, some lenders have a policy of not lending on what are known as ‘non-standard’ construction homes. You may find that houses which are completely timber on the outside may fall into this category. The range of lenders who are happy to lend is a subset of the overall lending market, and this is where building societies tend to be more flexible. This reduced range of lenders is something to be aware of, but should not stop you (or the people you’re selling to) from finding a lender for your home.
You might find it necessary to have a ten year structural warranty as a condition of lending and should investigate this before commencing your project. Warranty companies such as Protek usually offer warranties on log homes (other warranty providers are available). If buying an existing home and it is less than ten years old, ask the sellers if there is a warranty. Otherwise the process is similar to purchasing any other type of home.

If you’re planning to build (or buy) a mobile home (such as a log mobile home, or a lodge on a holiday park), you won’t be able to get a mortgage on this. There could still be options available to help to fund the project, especially if you’re then looking to rent it out as a holiday let, for example. A commercial broker is likely to be a good option here – if you don’t already have a local broker, please get in touch as we may have some useful contacts in our network.

As we’re not in the business of financial services, we can’t offer specific guidance. The financial services market is a highly regulated area, so please take advice from a trusted and regulated person / organisation.

We’ve met some very useful self build finance contacts over the years who are happy to help you further with borrowing for your self build project.

Mary Riley Solutions Ltd specifically helps find renovation, custom and self-build funding.  Use the ‘click here to contact us’ button at the bottom of their website to get in touch directly with them.

We also have some helpful contacts at Mayflower Mortgage and Finance. This company was set up specifically to help with self build mortgages – fill in the form below and they’ll contact you directly to arrange to discuss your requirements.