Question 1

How long does construction loan approval take in Salinas?

Accepted Answer

Expect 30-45 days from application to clear-to-close. Monterey County permit verification and appraisals add time compared to standard mortgages.

Question 2

Can I act as my own general contractor?

Accepted Answer

Some lenders allow owner-builders with construction experience and proper licenses. Most require a licensed general contractor to release loan draws.

Question 3

What happens if construction costs exceed my loan amount?

Accepted Answer

You cover overruns out of pocket. Lenders rarely increase construction loans mid-project unless you bring significant additional cash or equity to the deal.

Question 4

Do construction loans require mortgage insurance?

Accepted Answer

No. These are portfolio loans, not conforming products. You avoid PMI even with less than 20% equity during construction.

Question 5

How do rate locks work on construction loans?

Accepted Answer

Your rate locks when you convert to permanent financing, not during construction. Some lenders offer float-down options if rates drop before completion.

Question 6

Can I use construction loans for major renovations in Salinas?

Accepted Answer

Yes, if the project adds significant square footage or requires permits. Cosmetic remodels don't qualify—use a cash-out refinance or HELOC instead.

Construction Loans in Salinas: Finance Your Build in Monterey County