Question 1

How does a construction loan work in San Clemente?

Accepted Answer

Funds release in draws as construction milestones are met. At completion, the loan converts to a standard mortgage.

Question 2

Do I pay the full loan amount during construction?

Accepted Answer

No. You pay interest only on funds drawn so far. Full payments start after the loan converts to permanent financing.

Question 3

Can I use a construction loan to buy the lot first?

Accepted Answer

Some programs include lot purchase in the total loan. Others require you to own the land before they'll fund construction.

Question 4

What credit score do I need for a construction loan?

Accepted Answer

Most lenders require 680 minimum. Coastal custom builds often push that requirement to 720 or higher.

Question 5

How long does a construction loan term last?

Accepted Answer

Typical build periods are 12 months. Extensions are available but lenders charge fees and may reprice your rate.

Question 6

Does my builder need lender approval?

Accepted Answer

Yes. Lenders require your contractor to be licensed, insured, and financially vetted before approving the loan.

Construction Loans in San Clemente, CA