Build Your Dream Home with the Bank’s Money - Construction Loans Explained and Debated

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Dreaming of your perfect home but can’t find it on the market? In this episode of The Clear Close, Peter and Jason break down construction loans — how they work, who they’re for, and when it actually makes sense to build instead of buy. Whether you’re a first-time homebuyer, investor, or homeowner considering a custom build, this episode will help you decide if a construction loan is right for you.

What You’ll Learn:
What is construction loan and how dopes it differ from a mortgage
How do “draws” and inspections work during construction
Loan-to-cost (LTC) vs loan-to-value (LTV) explained
The 3 main types of construction loans: One-Time-Close, Two-Time-Close, and Renovation Loans
How experienced investors use construction loans strategically
Real talk (Pros and Cons): why some lenders and borrowers hate construction loans
How to avoid overruns and additional cost

Why Watch This:
Get clarity before you commit to a construction loan
Avoid rookie mistakes that cost time and money
Learn how pros combine HELOCs, DSCR, and construction loans for growth
Hear real-world lender insights

0:00 – Intro: Why Everyone’s Talking About Building Instead of Buying
00:35 – The Frustration of Finding “The Right” Home
02:03 – Construction Loan Basics: How It Really Works
03:14 – The 3 Main Types of Construction Loans (One-Time-Close, Two-Time-Close, and Renovation Loans)
05:04 – Qualifying Ratios: How Much Can You Actually Borrow?
07:10 – The Hidden Costs No One Talks About
08:00 – Why People Choose Construction Loans Over Buying Existing Homes
08:35 – Pros & Cons: The Real Risks and Rewards of Building
10:20 – Real Stories: When Construction Loans Go Right (and Wrong)
13:08 – Who Uses Construction Loans — Homeowners vs. Investors
24:05 – Choosing the Right Contractor: Your #1 Risk Factor

Questions We Answer:
How do construction loans work in 2026?
What’s the difference between a construction loan and a regular mortgage?
How do I qualify for a construction loan to build my dream home?
What credit score do I need for a construction loan?
How much down payment is required for a construction loan?
Can I use a construction loan to build an investment property?
What are the best banks for construction loans in 2026?
How long does it take to get approved for a construction loan?
What are the pros and cons of a one-time-close construction loan?
How do draw schedules work in a construction loan?
Can I be my own general contractor with a construction loan?
How does a construction-to-perm (C2P) loan work?
What are qualifying ratios for construction loans?
Can I use my land equity as a down payment for a construction loan?
Is a construction loan good for first-time home builders?
How are interest rates calculated on a construction loan?
Can I get a construction loan with bad credit or low income?
What documents do lenders need for a construction loan application?
What are the most common mistakes people make with construction loans?
How do I choose the right builder or contractor for my new home?
What happens if construction costs go over budget?
Are construction loans a good idea in a high-interest-rate market?
How does a renovation construction loan differ from new build financing?
Can I refinance my construction loan after the home is finished?
How do real estate investors use construction loans to grow their portfolio?

The Clear Close (DBA of West Capital Lending, Inc.) is an Equal Housing Lender; NMLS - 1566096
Jason Kim - NMLS 1680429 | DRE 02178073
Peter Ahn - NMLS 2664403 | DRE 02252395

https://westcapitallending.com/licensing
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https://nmlsconsumeraccess.org

Disclaimer:
The information presented in this video is for educational and informational purposes only and reflects the personal opinions of the creators. No specific company, product, or service is named, identified, or targeted in this video. Any references to financial products, loan structures, or business practices are general in nature and are not intended to refer to, represent, or describe any particular organization or provider.
The content in this video should not be interpreted as a statement of fact about any specific business and should not be considered financial, legal, or professional advice. Viewers should not assume that any examples or descriptions apply to a particular company, even if they appear similar.
All financial situations are unique. Always conduct your own research and consult with a qualified professional before making decisions regarding loans, equity products, or financial services.
By watching this video, you agree that the creators are not responsible for any actions you take based on the information presented. Nothing in this video is intended to harm the reputation of any individual or organization, and any resemblance to real companies or products is purely coincidental.