Can You Afford the Log Home You Want?

Defining affordability
Affordability is a combination of two factors: cost and financing. If the cost of the home of your dreams exceeds your ability to pay, it's not affordable.

Improving affordability
To improve affordability, therefore, you either have to reduce your costs or find a way to increase your finances — or both.

Buying an existing log home
If you plan to buy an existing log home, the question of affordability becomes a lot easier. You already know the asking price, and you can get an inspection to tell you if you'll have any repair costs (assuming the seller doesn't pay). All that's left is any remodeling you might want to do.

Then simply use our Affordability Calculator to see how you measure up with your finances.

Building a new log home
Determining the cost and affordability of building a new home is a multistage process. A suggested plan of attack is to first decide on the size of house you need. You can use our Home Size Estimator for this.

Then use our Log Home Cost Estimator to determine your approximate turn-key cost for a log home of this size. This will tell you about how much money you'll need.

Finally, use our Affordability Calculator to find out if you can afford a home of that size at that price, based on your financial situation.

If you can't afford it
What if you find that the cost to build exceeds your ability to finance? In this case, you can use the above calculators to play around with reducing the house size, eliminating extra features, and adjusting other costs. This will allow you to judge what size house your budget can tolerate. Also read What's it Going to Cost Me?.

If you find that the house that you can afford is simply too small for your needs, then you should attempt to improve your finances or look for creative financing techniques.

Do you have additional sources of cash that you haven't considered? Will your income increase in the near future? Do you have property or investments that you might want to liquidate? Can you reduce your debt load — pay off credit cards, consolidate some debts, pay off a car loan, or finish paying for the land that your log home will occupy?

Anything you can do to reduce your debt-to-income ratio will improve your chances of being approved by a mortgage company for the home loan that you want. The rule-of-thumb used by most lenders is that your total monthly debt obligations, including house payments, should not exceed 36% of your monthly gross income.

If none of the above remedies works out, you may have to admit that you aren't quite ready for the log home you've dreamed about. Putting your plans on the back burner for a few years may be your best option for now. In the future, your finances may improve such that you can revive your plans and get started again on your dreams.