Question 1

How long does construction loan approval take in Pacific Grove?

Accepted Answer

Expect 30-45 days for loan approval once you have complete plans and a contractor. Permitting adds 6-9 months before you can break ground and draw funds.

Question 2

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

Accepted Answer

Most lenders require a licensed general contractor with builder's risk insurance. A few portfolio lenders allow owner-builders but charge higher rates and require more experience.

Question 3

What happens if construction costs exceed the original budget?

Accepted Answer

The lender won't fund overages beyond the approved loan amount. You'll need cash reserves or additional financing to cover cost overruns mid-project.

Question 4

Do construction loans work for major renovations or just new builds?

Accepted Answer

Both work, but renovation loans have different draw schedules tied to existing structure. New builds typically fund faster since there's no demolition or hazardous material risk.

Question 5

How do interest rates on construction loans compare to regular mortgages?

Accepted Answer

Construction phase rates run 0.5-1.5% higher than permanent mortgages. One-time-close loans lock your permanent rate upfront, protecting against rate increases during the build.

Construction Loans in Pacific Grove — Build Your Coastal Dream