Question 1

How long does a typical construction loan last in Millbrae?

Accepted Answer

Most construction loans run 12-18 months, though San Mateo County permit processes may require longer terms. Choose a lender offering extensions to avoid rushed completion or penalties.

Question 2

Can I act as my own general contractor to save money?

Accepted Answer

Some lenders allow owner-builders, but many require licensed general contractors in California. Owner-builder projects typically need larger down payments and face stricter qualification requirements.

Question 3

What happens if construction costs exceed my loan amount?

Accepted Answer

You must cover overages with cash before final disbursement. This is why experienced builders budget 15-20% contingency for Bay Area projects where costs can shift unexpectedly.

Question 4

Do construction loans require interest payments during the build?

Accepted Answer

Yes, you pay interest only on funds already disbursed during construction. This amount increases as more draws are released, converting to principal and interest after completion.

Question 5

How does the construction-to-permanent conversion work?

Accepted Answer

Your construction loan automatically converts to a standard mortgage when building is complete and you receive your certificate of occupancy. The rate and terms are set at your initial closing.

Construction Loans in Millbrae: Build Your Custom Home Near SFO