Question 1

How long does construction loan approval take in San Mateo?

Accepted Answer

Plan on 45-60 days once you have complete plans and builder contracts. Lenders need time to verify everything because they're funding based on future value.

Question 2

Can I act as my own general contractor on a construction loan?

Accepted Answer

Most lenders require a licensed general contractor with verifiable track record. Owner-builder programs exist but require construction experience and higher down payments.

Question 3

What happens if construction costs exceed my loan amount?

Accepted Answer

You pay overruns out of pocket before lenders release final draws. That's why reserves matter and why you should budget 15-20% above estimates.

Question 4

Do construction loan rates differ from regular mortgage rates?

Accepted Answer

Construction phase rates run 0.5-1% higher than permanent mortgages. Your permanent rate gets set either upfront with single-close or at conversion with two-close loans.

Question 5

How do lender draws work during construction?

Accepted Answer

Lenders inspect progress at milestones like foundation, framing, and rough-in. They release funds after each inspection confirms work matches the draw schedule.

Question 6

Can I live in my current home while building in San Mateo?

Accepted Answer

Yes, but you'll carry both housing payments once construction starts. Lenders count both obligations in debt ratios, so you need income to support dual payments.

Construction Loans in San Mateo: Build Your Custom Home in the Peninsula