Question 1

How does a construction loan work in Lathrop?

Accepted Answer

Funds are released in draws as construction milestones are completed. Once the home is done, the loan converts to a permanent mortgage.

Question 2

Do I pay a full mortgage payment during construction?

Accepted Answer

No. During construction, you pay interest only on funds drawn. Full principal and interest payments begin after conversion to permanent financing.

Question 3

Can I act as my own general contractor?

Accepted Answer

Most lenders require a licensed, insured general contractor. Owner-builder exceptions exist but are rare and harder to get approved.

Question 4

What credit score do I need for a construction loan?

Accepted Answer

Plan on 680 minimum. Some programs allow lower scores, but expect tighter terms and higher rates. Rates vary by borrower profile and market conditions.

Question 5

How long do construction loan terms last in California?

Accepted Answer

Most construction phases run 12 months. Lenders may allow extensions, but those often come with fees and require updated documentation.

Question 6

What if my build goes over budget in San Joaquin County?

Accepted Answer

Lenders won't automatically add more funds. That's why a 10-15% contingency built into your original budget is critical before closing.

Construction Loans in Lathrop, CA — Build What You Can't Buy