Buying in Memorial before you sell your current home can feel like a high-wire act. You want the right property and timing without juggling two moves or losing a dream listing to a non-contingent buyer. A well-structured bridge loan can create the breathing room you need. In this guide, you’ll learn how bridge loans work in Texas, what they cost, when they make sense in Memorial, and smart alternatives to compare. Let’s dive in.
What is a bridge loan in Texas?
A bridge loan is short-term financing that uses your home equity to cover the gap between buying and selling. Texas law defines a bridge loan as temporary financing with interest-only payments until the balance comes due. You can review the state definition in the Texas Finance Code.
At the federal level, certain rules treat short-term bridge loans differently from permanent mortgages under specific conditions. See the Consumer Financial Protection Bureau’s guidance on temporary loans in Regulation Z commentary.
Practically, most bridge loans run 3 to 12 months, are interest-only during the term, and are repaid when you sell your current home or refinance into a permanent loan. Lenders focus on your equity and a clear exit strategy. For a plain-English primer, see NerdWallet’s overview.
Typical costs and terms
Bridge loans usually cost more than a standard mortgage. Recent ranges show roughly 6 to 12 percent APR for residential bridge products, with higher pricing for higher risk scenarios. Origination and closing fees commonly run about 1 to 3 percent of the loan amount, plus appraisal, title, and legal fees. Get current quotes since rates shift with market conditions. See the cost breakdown examples from LendingTree.
Many lenders cap total borrowing around 75 to 80 percent loan-to-value when counting all debt secured by the property. Exact limits vary by lender and your profile. Learn how lenders weigh equity, LTV, and exit plans in NerdWallet’s guide.
Why bridge loans fit Memorial moves
Memorial and the Memorial Villages attract luxury buyers and high-equity sellers. Market snapshots show the Memorial Villages posting median prices near or above the multi-million range, while broader Memorial sits lower, which means many owners have significant equity to leverage. See current neighborhood trends in Memorial Villages market reports and recent top-end activity covered by the Houston Chronicle.
Greater Houston inventory climbed in 2025, creating a more balanced landscape overall, yet prized Memorial listings can still move fast. Axios reported a sharp rise in active listings year over year, but submarket dynamics vary. If you want to make a strong, non-contingent offer on a standout home, a bridge loan can help you move once and keep control of timing.
How a bridge loan works step by step
- Confirm your equity and exit plan. Work with your agent to estimate sale price, net proceeds, and a realistic timeline for your specific Memorial sub-neighborhood.
- Get pre-qualified with 2 to 3 lenders. Compare total cost for a likely holding period, not just the rate. Ask for APR and a full fee sheet.
- Make your new-home offer. Your bridge can fund a down payment or purchase so you can write a clean, non-contingent offer.
- List and sell your current home. Coordinate staging, pricing, and launch timing to align with your bridge timeline.
- Repay at sale or refinance. Pay off the bridge when your current home closes, or refinance into permanent financing if that fits your plan.
Numbers to watch
- Equity and LTV limits: Many lenders cap combined LTV around 75 to 80 percent.
- Rate and fees: Expect roughly 6 to 12 percent APR and 1 to 3 percent in origination and closing costs. See examples from LendingTree.
- Term and extensions: Most terms are 3 to 12 months. Ask about extension options and fees up front.
Risks to plan around
- Carrying costs: If your home takes longer to sell, you may cover two payments plus bridge interest and fees.
- Market risk: If your sale price comes in below plan, you may need extra funds to repay the bridge.
- Extension costs: Some products charge to extend the term.
- Security and default: Bridge loans are secured by your home. Understand the collateral and consequences. Review key risk factors summarized by LendingTree.
Smart alternatives to compare
- HELOC on your current home: Flexible and often lower closing costs, with a variable rate. This can be an efficient way to access equity without a short balloon. See pros and cons in Experian’s overview.
- Cash-out refinance: Replace your mortgage with a larger one and use the proceeds for your next purchase. Typically lower rates than a bridge but can take longer. See NerdWallet’s guide.
- Buy-before-you-sell platforms: Providers like Homeward and Knock operate in Houston and can enable an all-cash or cash-like offer with coordinated timelines. Review program structures and fees via Homeward’s resources and a market overview from Purgula.
- Seller-side strategies: Longer closings, rent-backs, or sale contingencies may work in certain negotiations. These can reduce finance costs but are not always competitive.
Quick Memorial checklist
- Documents to gather: Current mortgage statements, property tax statements, recent comps, any appraisal, title info, and a written exit plan.
- Lender questions to ask:
- What is the exact interest rate and fee schedule, and how is interest charged? Provide APR and total estimated cost for my expected term. LendingTree
- What equity or LTV do you require, and how do you count existing mortgages? NerdWallet
- What is the maximum term, and what are the extension rules and fees? LendingTree
- How is the loan secured, and are there prepayment penalties? Experian
- For buy-before-you-sell programs: What are platform fees, leaseback or rent costs, and buyback terms? Homeward
When a bridge loan is not a fit
- You have limited equity, so LTV caps reduce usable funds.
- Your sub-neighborhood shows slower absorption and uncertain comps.
- You prefer not to hold two homes if timelines slip, or you want to minimize finance costs above all.
Make your Memorial move seamless
A bridge loan can give you timing control, negotiating strength, and the ability to move once. The key is precision: align the loan structure, listing strategy, and closing calendar so your exit is clear. If you want a data-driven plan tailored to Memorial or the Villages, connect with our team for confidential guidance and coordinated execution. Start the conversation with Nancy Almodovar.
FAQs
What is a bridge loan for a Memorial home purchase?
- A short-term, interest-only loan that lets you use equity from your current home to buy your next one, then repay when you sell or refinance.
How long does it take to get a bridge loan in Texas?
- Timelines vary by lender, but many close in a few weeks if documentation, equity, and the exit plan are clear.
How much do bridge loans cost in 2025?
- Many residential bridge products price around 6 to 12 percent APR, with 1 to 3 percent in origination and closing costs, plus standard third-party fees.
Can a bridge loan help me make a non-contingent offer?
- Yes, it can fund your down payment or purchase so you can write a clean offer while you prepare your current home for market.
What if my home in Memorial does not sell in time?
- Ask about extension options and fees before you sign, and build a conservative sale timeline with your agent to reduce carrying-cost risk.
What alternatives work if I have strong equity but want flexibility?
- Consider a HELOC, a cash-out refinance, or a buy-before-you-sell platform operating in Houston, and compare total costs, speed, and convenience.
