Creating a Budget for a Log or Timber Frame Home
Honest answers to realistic questions help in budget creation.
By Wayne Brady, Sales Representative, Honest Abe Crossville
In planning for a new wood home, it’s important to create a budget that allows for construction and considers future maintenance. Log home budgeting means asking yourself some realistic questions and answering them honestly.
- How much money are you willing to put into your new home?
- How much cash do you have available for a downpayment?
- How much can you afford in monthly payments to cover the amount you need to borrow?
- How much will the property taxes be on your finished home and land?
- How much homeowner’s insurance will you need to cover your investment?
- How much can you set aside for routine home maintenance and upkeep or non-covered emergencies?
If you require a loan to complete your home project, you’ll want to calculate your debt-to-income (DTI) ratio. This takes your monthly financial obligations like house payment, car loan, charge cards, etc. (not utilities, food, entertainment) and divides the total by your monthly income. The final number should not exceed 33-36 percent of the cost of the home you are planning to build. Your monthly house payment should not exceed 25 percent of your stable monthly income.
Learn a little more about financing options HERE.
At Honest Abe we’re experienced at helping you balance what you want and what you can afford. Give us a call and let us help make the budgeting process a little less scary.
