Do Texas Bridge Loans Really "Bridge the Gap" Between Homes?

Searching for a new home can be stressful, and if you need to take a loan out to do so, there can be some really strict contingencies on what you can do before you sell or move. Keeping all of your options open and considering “bridging the gap” as a possibility may be the best option for you and your situation.

Norman lived with his mother, but it was time to find a new home. Their current home was small, and as her medical needs increased, he wanted to find a new space that suited both of them. However, in most of Norman’s research, he found that there were some pretty strict requirements that he sell his current home first. It seemed that most lenders wanted the assurance that their borrower would be able to pay them back. While Norman understood, it wasn’t reasonable for him to sell his current home first. It would really ease the transition process on him and his mother if he could find the new home and work on selling their current home next. Fortunately for Norman, he was able to qualify for Texas bridge loans.

What Does “Bridge the Gap” Mean?

Norman soon found that Texas bridge loans were referred to in a variety of terms. A reference to swing loans, wraps, or “bridging the gap” all referred to the same thing. If one were to go into a loan agreement by “bridging the gap,” it would require putting a down payment on your current home so that you can fund your next purchase. This option alleviates any major contingencies and contracts that can put pressure on someone to sell their current home first.

As Norman’s mother was older and dependent on others for support, her having the opportunity to completely eliminate a transitory living space between moves was very attractive. It’s something that many people find appealing, as relocating can be much easier without having to rent out temporary living spaces or storage units. Norman was looking forward to learning more about the costs of “bridging the gap.”

Is “Bridging the Gap” Right for You?

Obtaining Texas bridge loans requires a strong credit score and a reasonable debt to income ratio. Needless to say, they aren’t perfect for every person in every situation. They require taking out a mortgage on two homes, your current and your new, and also have high interest rates. Additionally, they are meant to be paid back fast. Compared to other loan options, there is a short repayment period. This makes sense, however, as the goal would be to sell your current home as soon as possible. If your home can compete on the market, this may not be an issue. Knowing the realities of how it will fare, though, is something to consider.

Norman was thankful he qualified to “bridge the gap.” He was able to find a home that provided more for his current living situation, and it was less stress on his mom to have to bear more than one major move.


Dennis Dahlber Broker Ri CEO Level 4 Funding LLC
Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Hard Money Lender

Hard Money Loans

Hard Money Loan

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

Dennis@level4funding.com

Dennis Dahlberg Broker/RI/CEO

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22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave | Austin | Texas | 78701

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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