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Construction Loans in Hollister
Hollister sits in San Benito County, where land availability still makes custom builds viable. Construction loans let you finance both the land purchase and build costs in one package.
Most borrowers here use construction-to-permanent loans, which convert to a standard mortgage once your project wraps. That structure saves you from two separate closings and two sets of fees.
Lenders typically want 20-25% down for construction loans. Your credit score needs to hit 680 minimum, with 720+ getting you better terms.
You'll need detailed construction plans, a licensed contractor's bid, and enough reserves to cover 6-12 months of payments. Lenders fund in draws as construction milestones complete, not upfront.
Not every lender offers construction financing. Regional banks and credit unions in San Benito County sometimes have better terms than national lenders, but their underwriting takes longer.
We access wholesale construction lenders who fund in 30-45 days versus 60-90 at most retail banks. That timeline matters when you've got a contractor ready to break ground.
The biggest mistake: underestimating your budget. Add 15-20% contingency to your contractor's bid. Cost overruns kill more construction deals than credit issues.
Choose your contractor carefully. Lenders scrutinize contractor licenses, insurance, and track records. An unlicensed or poorly reviewed contractor tanks your approval instantly.
If you're renovating an existing Hollister property, compare construction loans against cash-out refinances or HELOCs. Renovation costs under $100K often work better with home equity products.
For ground-up builds, construction loans beat hard money loans on rate and terms. Hard money makes sense only if your credit or income disqualifies you from traditional construction financing.
San Benito County permit timelines run 8-16 weeks depending on project complexity. Factor that into your construction schedule since lenders limit how long the construction phase can run.
Water and sewer hookups in some Hollister areas require well or septic systems. Those costs add $15K-$40K to your budget and affect your loan-to-cost ratio.
Lenders release funds in stages as you hit milestones like foundation complete or framing done. An inspector verifies each stage before releasing the next draw.
Some lenders allow owner-builders, but most require a licensed contractor. Your rate and down payment increase significantly if you self-contract.
You pay overruns out of pocket. Lenders won't increase the loan mid-project, which is why budgeting a 15-20% contingency matters upfront.
Most construction loans allow 12 months to complete building. Extensions are possible but cost extra and require lender approval.
You pay interest-only on funds actually drawn, not the full loan amount. Once construction completes, it converts to your permanent mortgage rate.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.