Having a clear budget gives you confidence when talking with banks, builders, and designers. You’ll know what’s realistic, avoid wasting time, and move forward with a plan you can actually build.
A clear budget also gives your designer a target so they’re not aiming blindfolded. That’s how you avoid over-designing a home you can’t build, or under-designing a home you’ll outgrow.
Lenders look at your debt-to-income ratio (DTI)—your total monthly debt payments divided by your gross monthly income. A common underwriting guide is the 28/36 rule: aim for no more than ~28% of gross income on housing costs and ~36% on total debt (housing + all other monthly obligations). That 36% “back-end” number is a good planning guardrail even if a lender might approve more.
Let’s use round numbers similar to what we see with many owners:
Now translate $4,500/month into a loan amount. That depends on interest rate and term:
If you also have $100,000 set aside for a down payment, your project capacity is “loan amount + down payment,” minus an allowance for site costs (septic, well, driveway, utilities). In many rural builds, that site bucket can be significant. Get real numbers early. Typical ranges for septic, wells, driveways, impact/utility fees, and clearing vary widely by location.
Construction loans generally require larger down payments than standard mortgages, often 20–25% of total project costs. If you’re acting as an owner-builder, expect lenders to be stricter and sometimes require the higher end of that range; some programs may allow less (or more) depending on credit, equity in land, VA/FHA/USDA program rules, and lender policy.
Tip: If you plan to GC your own home, discuss requirements with multiple local lenders (credit unions are often more flexible) and be prepared with detailed plans, specs, bids, and a credible schedule. Lenders will ask for construction drawings, specifications, and written cost estimates to evaluate the loan.
Local banks are normally a good source to get a pulse on what new home prices are doing in your area. Ask them what a good, custom-built stick homes are being built for. This should give you some idea of what you should plan for your budget.
This average cost normally cover someone with an average lifestyle and taste. Average meaning a front door might cost $5000 and custom cabinets around $25,000. There is, however virtually no limit on what you can spend on your home.
Here's a closer look at typical log home pricing.
Get pre-approved before you commit to plans or land. This clarifies your cap and strengthens your position. When building with logs, choose a lender familiar with log/timber packages; they’ll ask for a materials contract/bill of materials, construction docs, and a log-appropriate appraisal package.
Follow the Trumpower Road Retreat from the first log to the final finish in our step-by-step photo story.
