Buying your next home before selling your current one can feel like a juggling act. You want the right property, a smooth move, and a strong offer without rushing your sale. If that sounds like you, a bridge loan may be worth a look. In this guide, you will learn what a bridge loan is, how it works, real costs and risks, Kerr County timing factors, and practical alternatives. Let’s dive in.

Bridge loan basics

A bridge loan is a short‑term loan that taps your current home’s equity so you can buy your next home before you sell. It fills the gap between the two transactions.

Here is what that usually means:

• The bridge is secured by your current home.
• Terms are short, commonly 3 to 12 months.
• Rates and fees are higher than a standard mortgage.
• The loan is typically repaid from the proceeds when your current home sells.

For move‑up buyers, the big benefit is the ability to make a non‑contingent offer, which can strengthen your position with a seller.

How a bridge loan works

The process is straightforward if you plan ahead. Most lenders follow a similar path:

1. Pre‑qualification

• You apply with a lender that offers bridge loans. They review your credit, income, and equity in your current home.

2. Underwriting and appraisal

• The lender verifies your mortgage balance and orders an appraisal. Some will also appraise the home you want to buy.

3. Bridge loan closing

• The lender records a lien on your current property. Funds are set up for closing on the new purchase.

4. Buy your next home

• You close on the new home using bridge funds for the down payment or, in some cases, as an all‑cash purchase.

5. Sell your current home

• When your current home sells, the bridge loan is paid off from the sale proceeds. Any remaining funds go to you.

Typical timelines

• Application to funding: often 1 to 3 weeks with experienced lenders, longer if title issues arise.
• Bridge term: usually 3 to 12 months, with possible extensions and fees.
• Time to sell: market dependent. In parts of Kerr County, plan conservatively for 60 to 120 or more days to reduce risk.

Qualification details to know

• Some lenders require you to show you can carry the new mortgage and the bridge payment until your home sells.
• Others may require full pre‑approval on the new mortgage, including reserves.

Eligibility, sizing, and costs

Every lender sets its own rules, but most look at your equity and total liens.

Equity and loan size

• Many lenders cap total liens at 75 to 80% combined loan‑to‑value (CLTV). Your bridge amount is often the difference between that cap and your current mortgage balance.
• You typically need at least 20% to 30% equity to qualify.

Cost components to compare

• Interest rate: higher than standard mortgages due to short term and risk.
• Origination fee: often 1% to 3% of the bridge amount.
• Appraisal, title, and recording fees: similar to a typical closing.
• Extension fees and prepayment terms: ask about penalties or daily interest if your sale is delayed.
• Monthly payments: many bridges are interest‑only until payoff, but terms vary.

Repayment mechanics

• The bridge is repaid at closing when your current home sells. If the home does not sell within the term, you keep paying interest and could face fees.
• If you cannot sell and cannot make payments, you risk foreclosure because the bridge is secured by your home.

Impact on your new mortgage

• Lenders handle this differently. Some will count only the new mortgage, while others count both the new mortgage and bridge payment in your debt‑to‑income ratio. Expect to document reserves.

Pros and cons for Kerr County buyers

Understanding the trade‑offs helps you decide if this path fits your goals.

Pros

• Stronger offers without a home‑sale contingency.
• More time to shop, stage, or prep your current home for market.
• Cleaner move and the option to manage renovations or repairs before you move in.

Cons and risks

• Higher cost than standard financing or a HELOC.
• You could carry two housing payments if your home takes longer to sell.
• Qualifying can be tighter if a lender counts both payments.
• Added complexity: extra appraisal, title work, and a second closing.

Kerr County timing factors

Kerr County includes small towns like Kerrville and rural areas where listings can take longer to sell than in large metros. That does not rule out a bridge, but it does change your risk profile.

Consider these local realities:

• Market speed varies by property type. Acreage and rural homes may require more time and targeted marketing.
• Plan for a conservative sale timeline, such as 60 to 120 or more days.
• Ask your agent for a fresh CMA to set realistic pricing and understand the current buyer pool in your segment.

Alternatives to bridge loans

A bridge is not the only way to buy first. Compare these options side by side with your lender and agent:

• HELOC (home equity line of credit): Generally lower cost and flexible draws, but may have draw limits or variable rates.
• Home equity loan: Fixed amount, often lower cost than a dedicated bridge, but it is longer term.
• Cash‑out refinance: Replaces your current mortgage with a larger loan that provides cash. It could reset your rate and term.
• Contingent offer or coordinated closings: Still possible, though less competitive with sellers.
• Trade‑in or buy‑and‑leaseback programs: Third parties can help you buy without contingency, for a fee and subject to local availability.

Smart next steps checklist

Use this short list to reduce surprises and keep your plan on track:

• Get a current CMA to estimate days on market and net proceeds.
• Meet with one or two Texas lenders who offer bridge loans to compare:
  • Maximum advance and CLTV rules.
  • Rate, fees, payment structure, term, and extension policies.
  • How the bridge will be treated in underwriting for your new mortgage.
• Run worst‑case cash flow scenarios for a sale delay of 60 to 120 or more days.
• Ask about brokerage programs that can help with staging, repairs, or a faster sale.
• Confirm any title, HOA, or lien issues that could delay recording the bridge lien.
• Get every cost estimate in writing before you sign.

When a bridge can fit

A bridge can work well if you have strong equity, solid credit, and enough reserves to comfortably carry payments for several months. It is especially useful when a special property hits the market and you want to act without a contingency, while still giving your current home the time and presentation it deserves.

Common mistakes to avoid

• Skipping a conservative sale timeline. Underestimating days on market increases risk.
• Ignoring extension terms. Know the fees if you need more time.
• Overextending budget. Make sure you can carry payments if the sale lags.
• Delaying prep on your current home. Staging and repairs can shorten time to contract.

Final thoughts

Bridge loans give you flexibility. They can help you compete, control your timeline, and move with less stress. The key is pairing the right lending structure with a realistic local sale plan. If you want a tailored assessment of your options, a fresh CMA, or introductions to trusted lenders in Texas, we are here to help.

Ready to explore your next move with a clear plan? Reach out to Harlan Realty Group to Request a Confidential Home Valuation and a private strategy consult.

FAQs

What is a bridge loan for move‑up buyers?

• A short‑term loan that uses your current home’s equity to fund your next purchase so you can buy first and repay the bridge when your current home sells.

How long do bridge loans usually last in Kerr County?

• Most terms run 3 to 12 months, with some lenders offering extensions for a fee if your sale takes longer.

Do I need to qualify for both payments at once?

• Many lenders require you to show you can carry the new mortgage and the bridge payment until your current home closes; rules vary by lender.

What happens if my home does not sell in time?

• You continue paying interest and could owe extension fees. If you cannot pay, you risk foreclosure because the bridge is secured by your home.

Are there lower‑cost alternatives to a bridge?

• Yes. HELOCs, home equity loans, cash‑out refinances, and contingent offers are common alternatives, each with different costs and trade‑offs.

Will a bridge loan affect my new mortgage approval?

• It appears as a liability. Some underwriters count both payments in your debt‑to‑income ratio, while others count only the new mortgage.

Can I use a bridge loan on a second home or investment property?

• Many lenders limit bridge loans to owner‑occupied homes used for a purchase, but eligibility rules vary. Ask lenders about their specific policies.