Bridge Loans In Preston Hollow: Buy Before You Sell

Buying your next Preston Hollow home before you sell your current one can feel like a high-wire act. You want to avoid a double move, keep your kids’ routines steady, and still move fast when the right property hits the market. Bridge financing can make that possible, but you should know how it works, what it costs, and when it is the right fit. In this guide, you’ll learn the essentials, practical alternatives, a local step-by-step plan, and a simple checklist to help you move with confidence. Let’s dive in.

What a bridge loan is

A bridge loan is short-term financing that helps you close on a new home before the proceeds from your current home are available. It gives you liquidity so you can make a strong offer without waiting on your sale. Buyers often use bridge loans when they need to be competitive with non-contingent offers, want to avoid temporary housing, or must close quickly.

Common structures include closed-end bridge loans that are repaid once your current home sells, open-end or purchase-assist loans tied to the new mortgage, and hybrid solutions structured as a second mortgage. Some products come from private or portfolio lenders who underwrite case by case. All options are designed to be short term and repaid with your sale proceeds.

How bridge loans work in Preston Hollow

Most bridge loans are secured by your current home, or by both your current and new property together. The term is typically short, often 3 to 12 months, sometimes with an option to extend. Many products require interest-only payments during the term with a principal balloon payment due when your home sells or at maturity.

Lenders size the loan based on your home’s equity and their combined loan-to-value limits. While specific limits vary by lender and borrower strength, advances are often capped at a percentage of your current home’s value minus any existing mortgages. Underwriting is usually conservative to protect against valuation changes.

Expect full documentation: proof of income and employment, a credit check, mortgage payoff statements, and an appraisal or broker price opinion to confirm value. You may also be asked for the purchase contract on your new home and to list your current home within a set timeframe. The bridge is typically paid off from your sale proceeds at closing.

Costs and terms to expect

Bridge loans usually carry higher interest rates than standard mortgages because they are short term and higher risk. Interest is often charged monthly and may be interest-only. You will also see transaction costs that can include an origination fee, appraisal, title and closing costs, and sometimes an exit or extension fee if repayment takes longer than planned.

Many bridge loans allow early payoff once your home sells. Always confirm whether prepayment penalties apply and get all fees in writing. Compare your total expected cost over the months you plan to hold the loan, not just the interest rate.

Key risks to weigh

The biggest risk is carrying costs if your home takes longer to sell. You could be responsible for two sets of payments for several months, including mortgages, taxes, insurance, and utilities. If you need an extension, you may face additional fees or a higher rate. Price changes between your bridge closing and your sale can also reduce equity and raise your risk.

Protect yourself by modeling the monthly costs for at least 3 to 12 months and by aligning your list price and preparation strategy with realistic local conditions. A clear plan to launch your listing quickly can make a meaningful difference.

Alternatives to compare

Before you commit, compare bridge financing to other tools. Each option has tradeoffs in cost, speed, and flexibility.

HELOC (home equity line of credit)

A HELOC is a revolving line secured by your current home. It typically offers flexible draws and repayments and may carry a lower cost than a bridge loan. Downsides include variable rates and lender limits based on combined loan-to-value. It works best when you have solid equity and want flexibility.

Home equity loan (second mortgage)

This is a fixed-rate lump sum secured by your current home. Payments are predictable and often cheaper than a dedicated bridge loan. It adds a second mortgage obligation and can take longer to process. It fits when you need a defined amount and prefer fixed terms.

Cash-out refinance

You replace your current mortgage with a larger one and take cash at closing. You end up with a single loan and may access significant funds. The tradeoffs are closing costs, longer processing time, and the possibility of changing a favorable existing rate. It makes sense when the new terms align with your goals.

Mortgage recast

After you sell and make a large principal payment, your lender recalculates your monthly payment based on the lower balance, usually for a small fee. A recast can be a low-cost way to reduce your payment on the new home after closing. It requires a lump-sum payment and depends on lender and loan type.

Contingent offer

You make your purchase contingent on selling your current home. This keeps debt lower and avoids bridge costs. In competitive segments of Preston Hollow, sellers may prefer non-contingent offers, so this strategy works best when inventory is higher and competition is lighter.

Rent-back or post-closing occupancy

If you sell first, you can negotiate to stay in your home for a set period after closing while you buy. This reduces the need for a double move and can create breathing room, but it depends on seller and buyer cooperation and may involve daily rent.

Quick comparison snapshot

• Liquidity and speed: Bridge loan and HELOC tend to be faster access. Refinance and home equity loans may take longer.
• Cost: HELOC, home equity, or cash-out are often lower cost than a dedicated bridge loan.
• Risk: Any buy-first plan involves carrying costs. Bridge loans can be the most expensive in the short term, so timeline discipline matters.

When a bridge loan fits in Preston Hollow

Preston Hollow is a desirable, established Dallas neighborhood where certain price tiers can see strong competition. In these segments, a non-contingent offer may be the difference between winning and missing out. A bridge loan can help you act quickly when you have solid equity and a clear plan to sell.

Use this checklist to test fit:

• Equity position: Do you have enough clear equity to fund the bridge without pushing combined loan-to-value beyond lender limits?
• Monthly capacity: Can you comfortably carry two properties for 3 to 12 months, including insurance, taxes, and utilities?
• Market confidence: Are homes in your price range moving at a reasonable pace right now? If not, consider alternatives.
• Timeline match: Can you list quickly with a realistic plan so the bridge term covers your sale window?
• Cost comparison: Does the total cost of the bridge for your expected hold period make sense versus a HELOC or second mortgage?
• Lender flexibility: Are you comfortable with requirements like listing by a set date and using your sale proceeds to repay the bridge?

Real-world scenarios

• Scenario A: You have 60 to 70 percent equity and need a non-contingent offer for a high-demand Preston Hollow listing. A bridge or purchase-assist structure can be worth the short-term cost to secure the property.
• Scenario B: You have strong equity and a low first-mortgage rate you want to keep. A HELOC or second mortgage may be more cost-effective than a dedicated bridge.
• Scenario C: Your equity is tight or your target segment is selling slowly. Avoid a bridge unless you can carry two homes for longer than expected. Consider a contingency or a rent-back.
• Scenario D: You can access cash from other sources. Weigh fees, taxes, and liquidity impacts before using them instead of a bridge.

A practical local timeline

• Week 0: Get pre-approved for your new mortgage and speak with a bridge lender to confirm loan size, timeline, and costs. Have your current home’s value verified by appraisal or broker opinion.
• Weeks 1 to 2: Apply for the bridge loan. Provide income and asset documentation, mortgage payoff statements, and any purchase contract you have.
• Weeks 2 to 4: Close the bridge loan and prepare to deploy funds toward your purchase and move.
• Month 0 to 3: Close on the new home. Make interest payments if required. List your current home promptly with full market preparation.
• Sale closing: Use proceeds to repay the bridge loan and any remaining obligations. If the sale is delayed, discuss an extension or alternate payoff plan early.

Smart prep checklist

Before you commit, confirm these items in writing:

• Terms and fees: Loan term, interest structure, origination, appraisal, title, closing, extension, and any exit or prepayment fees.
• Payments: Whether payments are interest-only and whether principal is due as a balloon at sale.
• Valuation method: How your current home’s value will be determined and what combined loan-to-value limits apply.
• Documentation: Full list of required documents and the expected closing timeline.
• If-then plans: What happens if your home does not sell within the term, including extension costs and options.
• Sale strategy: Your listing plan, pricing approach, and preparation schedule so the bridge aligns with your market window.
• Tax questions: Ask your CPA about interest deductibility and any tax considerations for your situation.

How The Blackman Group can help

You do not need to navigate this alone. Our team pairs hyperlocal Preston Hollow expertise with hands-on, make-ready guidance to launch your listing quickly and attract qualified buyers. We also help you compare bridge financing with alternatives like HELOCs and rent-backs, then build a timeline that reduces disruption and keeps you on budget.

If you want a second set of eyes on costs, timelines, and strategy, reach out for a personalized plan that fits your goals. Ready to explore your options and secure the right next home without a double move? Start the conversation with Chris Blackman.

FAQs

What is a bridge loan for buying before selling in Preston Hollow?

• A bridge loan is short-term financing secured by your current home that lets you purchase a new home first and repay the loan with your sale proceeds.

How long do bridge loans typically last for Dallas buyers?

• Many run 3 to 12 months with possible extensions, and lenders expect you to list and sell within that window.

What costs should I expect with a bridge loan in Texas?

• Expect a higher rate than a standard mortgage plus fees like origination, appraisal, title, closing, and possibly extension or exit fees.

How do bridge loans compare with HELOCs for Preston Hollow move-up buyers?

• HELOCs may carry lower costs and flexible draws but have variable rates and lender limits, while bridge loans prioritize speed and non-contingent offers.

What happens if my Dallas home does not sell before the bridge loan matures?

• You may need to extend the loan for a fee or use other funds to repay, and you must be prepared to carry two homes longer than planned.

Can I make interest-only payments on a bridge loan?

• Many products require interest-only payments with a balloon payoff when your current home sells, but terms vary by lender.

Is a contingent offer still an option in Preston Hollow?

• Yes, but sellers often prefer non-contingent offers in competitive segments, so a contingency works best when inventory is higher and competition is lighter.

Will a mortgage recast help after I sell my current home?

• A recast can reduce your monthly payment on the new home after you make a large principal payment, subject to your lender’s rules.