Question 1

What credit score do I need for a construction loan in Capitola?

Accepted Answer

Most lenders require 680 minimum. Coastal projects often push that to 700 or higher.

Question 2

How does a construction loan convert to a permanent mortgage?

Accepted Answer

With a one-time-close loan, it converts automatically at completion. Two-time-close requires a second closing and new approval.

Question 3

Can I use a construction loan for a major renovation?

Accepted Answer

Yes. Major renovation financing works similarly but scope and permits must satisfy lender guidelines.

Question 4

How long does construction loan approval take in Santa Cruz County?

Accepted Answer

Loan approval can take 30–60 days. County permitting often adds months before construction can start.

Question 5

Does my contractor need lender approval?

Accepted Answer

Yes. Most construction lenders require a licensed, insured general contractor they review and approve before funding.

Question 6

What happens if my build goes over budget?

Accepted Answer

Your loan won't expand to cover overruns. You'll need cash reserves or a separate line of credit to cover the gap.

Construction Loans in Capitola, CA