Question 1

How much do I need down for a construction loan in King City?

Accepted Answer

Expect 20% minimum if financing land and construction together, or 25% if you own the land already. Higher down payments unlock better rates and more lender options.

Question 2

Can I act as my own general contractor on a construction loan?

Accepted Answer

Most lenders require a licensed contractor with proper insurance and a track record. Owner-builder loans exist but have stricter requirements and higher rates.

Question 3

What happens if construction costs exceed my loan amount?

Accepted Answer

You pay overages out of pocket or halt construction until you secure additional funds. Budget conservatively and include 15-20% contingency in your initial loan request.

Question 4

How long does construction loan approval take?

Accepted Answer

45-60 days from application to approval for complete packages with plans, contractor docs, and budget. Missing documentation adds weeks to underwriting timelines.

Question 5

Do construction loan rates differ from regular mortgage rates?

Accepted Answer

Construction rates typically run 0.5-1% higher than conventional mortgages due to added lender risk. Your permanent rate locks at closing and takes effect when construction completes.

Construction Loans in King City: Build Your Home with the Right Financing