Question 1

How does a construction loan work in Laguna Niguel?

Accepted Answer

Funds are released in draws as construction milestones are met. Once the build is complete, the loan converts to a permanent mortgage.

Question 2

Can I use a construction loan to build a custom home here?

Accepted Answer

Yes. Custom builds are the most common use. Your builder must be licensed and approved by the lender before draws begin.

Question 3

Do I make payments during construction?

Accepted Answer

Most programs charge interest-only on funds drawn. Full principal and interest payments begin after the loan converts.

Question 4

What if my build goes over budget?

Accepted Answer

Lenders expect a contingency — typically 10-15% of the build cost. Going beyond that may require renegotiating the loan.

Question 5

How long can a construction loan term last?

Accepted Answer

Most construction periods run 12-18 months. Extensions are possible but require lender approval and sometimes additional fees.

Question 6

Is a one-time-close or two-time-close better in Orange County?

Accepted Answer

One-time-close avoids a second appraisal and closing costs. Two-time-close makes sense only if you expect rates to fall significantly.

Construction Loans in Laguna Niguel, CA