In the coming months I will need to convert my construction loan to a Jumbo. To those in the know, can you describe what this process is currently looking like? My bank has my construction loan that is set to expire in late August. What are my options with them if I am having issues obtaining said Jumbo? Will they be ok extending the loan as long as I stay current?

You just need the standard refinance in jumbo market. Start about 45 days before the home is complete.

Any harm in waiting until the summer with the hopes rates might tame (even though the house will be completed)? Also, doesnt it need to be completed to get an appraisal?

The long locks are not great. Time costs money. Beginning at 45-50 days is locking at fair market terms and doing the paperwork. I would monitor the completeness and send an appraiser when the homes interior is mostly complete. Basically livable if needed. Landscape is only a minor concern. An appraiser knows you will lay grass etc

Thanks, Steve! What rates are you seeing now for Jumbos?

Mostly ugly. But jumbos are very independent and investor driven. So there can be wide differences in rates. I'd check a few credit unions since they were offering decent rates last I checked a couple of weeks ago.

Think you need to be working with your lender to understand any underwriting challenges you may have with the jumbo sooner rather than later. For instance, they may want even more equity in the home, may want an explanation of whether you are impacted by COVID-19 in regards to your income, etc.

See if you can get one of the mortgage brokers to chime in on the jumbo market.

Edited: Looks like SteveBott has chimed in.

Will do and thank you for the information.

Last question, what position should I expect from the construction lender in the event obtaining this loan in the present economic conditions proves to be a bit of a "challenge?" As long as I keep paying it I assume they should be happy to collect their monthly 6%....? Construction loan expires in August.

I just assumed he had 20% equity to get the construction loan approved. That should do it.

As for extending the current loan if you are paying on time I doubt the current lender will hassle you too much but will want you to work on closing it out

A one time close construction loan would have avoided this situation. You would not have needed to re-qualify at completion as the loan modifies to permanent. Do you have concerns that you'll qualify for a jumbo? If so contact the construction lender now rather than later. If it's not their practice to originate mortgages it may not be as simple as you staying current to get a renewal. If they have to convert this to a mortgage they're going to have some regulatory issues they're not typically dealing with.

Completely aware of the merits of one time close vs the alternative. Unfortunately for a host of reasons, the one time wasn't in the cards.

Yes, with the current state of viral affairs, I can see some hurdles on the horizon. I want to get this taken care of, but what options of recourse does my lender have if I cannot secure financing before August? If I claim homestead and keep the loan current, I assume they cannot evict?

You should call them early on I think. Given the market we're in now I would get something set up 90 days early. What I'm seeing is the process taking longer than typical.

We are still doing jumbo loans at 3.5% in the DFW, Austin and San Antonio market, a bit higher in Houston. Love to talk to you about but who knows were we will be this summer.