Question 1

How does a construction loan work in Del Rey Oaks?

Accepted Answer

The lender releases funds in stages called draws as construction hits set milestones. You pay interest only on what's been drawn, then the loan converts to a mortgage when the home is complete.

Question 2

What credit score do I need for a construction loan?

Accepted Answer

Most lenders require 680 minimum. Aim for 720 or higher to access better terms and more lender options.

Question 3

Can I use my land as a down payment?

Accepted Answer

Yes, if you own the land free and clear or have significant equity in it. Lenders will appraise the land and apply its value toward your required contribution.

Question 4

How long does a construction loan last?

Accepted Answer

Typically 12 to 18 months. Monterey County permitting timelines make choosing a lender with a flexible term extension option very important.

Question 5

Do I need a licensed builder to qualify?

Accepted Answer

Yes. Lenders require a licensed, insured general contractor. Owner-builder loans exist but are rare and much harder to qualify for.

Question 6

What happens if my build goes over budget?

Accepted Answer

The lender won't increase your loan mid-build. You cover overruns out of pocket, so build a cash reserve into your plan from day one.

Construction Loans in Del Rey Oaks, CA