Question 1

How does a construction loan convert to a mortgage?

Accepted Answer

At build completion, the loan converts — or you refinance — into a standard mortgage. Most construction-to-perm loans do this automatically.

Question 2

Do I pay interest during the build?

Accepted Answer

Yes, but only on drawn funds. If your lender has released $300K of a $1M loan, you pay interest on $300K only.

Question 3

Can I use a construction loan on a teardown in Del Mar?

Accepted Answer

Yes. Many Del Mar borrowers tear down and rebuild. The loan covers demolition and new construction costs.

Question 4

What credit score do I need for a construction loan?

Accepted Answer

Most lenders require 680 minimum. Del Mar's higher loan amounts often push that threshold closer to 720.

Question 5

How long does a construction loan last?

Accepted Answer

Typically 12 to 18 months. Coastal permitting in Del Mar can stress that timeline — plan for it early.

Question 6

Can I be my own general contractor?

Accepted Answer

Rarely. Most lenders require a licensed GC with verifiable project history. Owner-builder exceptions exist but are uncommon.

Construction Loans in Del Mar, CA