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Couple reviewing home construction timeline to avoid double mortgage

How to Avoid the Double Mortgage When Building a New Home in Dallas-Fort Worth

July 09, 20255 min read

How to Avoid the Double Mortgage When Building a New Home in Dallas-Fort Worth

by Steve

Couple reviewing home construction timeline to avoid double mortgage

Introduction: Why the Double Mortgage Trap Catches So Many Buyers

Building a new home sounds exciting—until you realize you might be stuck paying two mortgages. One on the home you live in. Another on the one still under construction. That financial squeeze keeps a lot of buyers on the sidelines.

The good news? You have options. With the right timing, financing strategy, and prep, you can build your dream home in Dallas-Fort Worth without carrying two mortgages at once.

This guide breaks it all down—without the jargon.

Neighborhood Spotlight: Where New Construction Is Booming

If you’re looking to build new in Dallas-Fort Worth, these communities offer strong inventory, flexible builders, and resale-friendly timelines:

Forney

Master-planned communities like Devonshire and Gateway Parks offer great schools, walking trails, and builder incentives that help you time your sale.

Celina

Known for its growing builder presence (Perry, Highland, M/I Homes), Celina allows more flexible closing dates—ideal when selling your current home first.

Mansfield

Offers high resale demand and newer developments with builder-backed financing partners. Great if you're leveraging a construction-to-permanent loan.

Explore new construction options here: Dallas-Fort Worth New Construction Homes

Local Market Trends: Why This Matters More in 2025

With high demand and low resale inventory, more buyers are building instead of buying existing homes.

2025 DFW Stats (Redfin + CoreLogic):

  • New construction closings up 24% YoY

  • 32% of buyers delayed building due to “fear of carrying two mortgages”

  • Average time to build: 6.8 months

  • Median home price: $449,000

  • Mortgage rates: Hovering around 6.25% – 6.75%

“Most people think double mortgages are unavoidable when building. They’re not. You just need the right loan structure and sale timeline.”
Jason Fuller, Mortgage Consultant, Dallas

Cost Breakdown: What a Double Mortgage Looks Like (And How to Avoid It)

Cost Type Avg. Monthly Amount Avoidable? Existing Mortgage $2,100 Construction Loan Payment $1,700 Temporary Housing $1,400 Property Taxes (on both) $600

You don’t want to juggle that. Here's how to not end up here.

Builder & Community Insights: Who Can Help You Avoid the Overlap

Top Dallas builders often offer more flexible closing options, rent-back programs, and on-site lenders with specialized products.

Perry Homes

Offers extended move-in dates, which can give you time to sell before your first construction payment hits.

Highland Homes

Known for their flexibility and experience with buyers using construction-to-permanent (C2P) loans.

Bloomfield Homes

Some communities offer 90- to 180-day closing windows, letting you sell first with breathing room.

Pro Tip: Download this New Construction Home Guide before you sign a contract—it helps you map your timeline right.

Financing & Incentives: Strategies That Prevent Two Mortgages

Here are the top ways to avoid the double mortgage trap when building new:

1. Use a Bridge Loan

This loan uses the equity in your current home to fund the down payment on your new build—without selling first. You repay it after your current home sells.

When it works best:

  • You’re in a hot market with high resale demand

  • Your current mortgage is nearly paid off

Learn about your selling options here

2. Ask About Construction-to-Permanent Loans

This loan funds construction and then converts into a traditional mortgage once the home is complete. You only pay interest during the build.

When it works best:

  • You’re keeping your existing home until move-in

  • You want one closing and one set of fees

Start here: Get Pre-Approved

3. Sell Your Current Home First + Leaseback

Sell your home now, but lease it from the new owner for 60–90 days while your new home finishes.

When it works best:

  • You need a flexible transition

  • You want to unlock your equity now

Calculate your home’s readiness: Home Seller Score

4. Use the Builder’s Incentives Wisely

Many builders offer:

  • Closing cost coverage

  • Delayed first payment options

  • Temporary interest rate buydowns

Ask what’s available. It can cover part of your overlap expenses.

Join the New Construction Webinar to learn how these incentives work.

Conclusion: You Don’t Have to Carry Two Mortgages. Really.

Avoiding the double mortgage comes down to three things:

  1. Right financing (C2P or bridge loan)

  2. Right timing (sell before you close)

  3. Right builder (with incentives and flexibility)

You don’t need to be stressed while building. Plan early. Work with a pro. And always ask about your options.

Download the Lone Star Living App now
Use the New Construction Guide
Save money with the Rebate Program

You're Always Home With Refind Realty!

FAQs – Real Buyer Questions About Avoiding Two Mortgages

1. Can I avoid paying two mortgages when building a house?

Yes. With the right financing and sale strategy, you can avoid or minimize overlapping payments.

2. Should I sell my house before building a new one?

If you need equity for your next down payment, yes. But use a leaseback or temporary housing plan so you’re not homeless during construction.

3. What is a construction-to-permanent loan?

It’s a mortgage that funds your build and automatically becomes your permanent mortgage after completion—only one closing and interest-only payments during the build.

4. How long will I have to pay both mortgages?

If you plan it right—you won’t. A leaseback, bridge loan, or builder incentive can remove the overlap entirely.

5. Is temporary housing better than a double mortgage?

Sometimes, yes. If you can stay with family or rent affordably, it can save thousands compared to carrying two full mortgage payments.

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Steven J Thomas
Dallas realtor


Owned and Operated by Thomas & Thomas Financial Group, LLC

Steven J. Thomas

Steven J. Thomas has been in the financial services industry for the past 19 years and started my career as a Financial Planner for American Express Financial Advisors. I entered into banking with JP Morgan Chase as personal banker in 2003 and was promoted several times up to Small Business Specialist. I earned multiple Million Dollar Club awards and was ranked in the top 5 Small Business Specialist before I branched out in 2005 to start my own Financial Management Company. I ran a successful company before family circumstances lead me to Wachovia Bank in 2008 where I worked as a Senior Financial Specialist. As a Sr. Financial Specialist; I was responsible for the P & L and revenue growth of my banking center. The elimination of my role thru a bank merger lead me to BBVA Compass. I have held various leadership roles at BBVA Compass including Personal Relationship Manager, Branch Retail Executive, Workplace Solutions VP, and his current role as a Retail Manager. As the Regional Workplace Solutions VP, I was responsible for the strategic, tactical, and execution of Partnership Banking relationships, promotion and activity with corporate and non-profit companies in my footprint. I was responsible for the acquisition production for three districts, which includes 51 banking centers and over 300 employees. In May of 2014, I joined the team at Refind Realty and became one of the managing partners in mid-2015.

  • 50+ 5 Star Reviews

  • Over $60,000,000 in Total Real Estate Sales

  • 167 Properties Sold

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succesfull real estate agent testimonials

I used this realtor and it was a great experience. He was patient and very helpful with our journey. He also helped us find a great lender with little hassle on the process, also got us approved for well above the market of our original home so we were able to get more house with a lower mortgage rate. So to anyone who is interested in buying a home take my advice give Steven a call. It’s worth it 😁

Bryant Loring

Steve was absolutely amazing! Everything was easy! Very professional in all aspects. Punctual, responsive, and diligent. He goes above and beyond to ensure you get to see as many homes as you’d like no matter the location. Not only was he knowledgeable about home buying, he also has a resourceful network for new home owner needs. I recommend Refind Realty to everyone!

Nicholas Bishop

I definitely recommend Steven to assist with your home buying needs. As a first time home buyer the process can be overwhelming, but as my realtor he was knowledgeable & patient while addressing my concerns and assisting me with my new home purchase. Thanks again Steven!! :-)

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Ask Us Anything

Frequently Asked Questions

Why do you need a Realtor?

When buying or selling a home, there are so many options…which can also present a lot of obstacles. Laws change, forms change, and practices change all the time in the real estate industry. Because it’s our job to stay on top of those things, hiring a realtor reduces risk, and can also save you a lot of money in the long run.

When you work with me as your Realtor, you’re getting an expert who knows the area; knows how to skillfully guide your experience as a seller or buyer; can easily spot the difference between a good deal and a great deal. My job is to translate your dream into a real estate reality, and I work hard to earn and keep my business. This also means earning your trust: When you work with me, you’ll be working with a realtor who looks out for your best interests and is invested in your goals.

Which loan should you choose?

There are two different types of loans conventional loans and government-backed loans. The main difference is who insures these loans:

1 - Government-backed loans (FHA, VA and USDA):

(a) - Are, unsurprisingly, backed by the government.

(b) - Include FHA loans, VA loans, and USDA loans.

(c) - Make up less than 40 percent of the home loans generated in the U.S. each year.

2 - Conventional loans

(a) - Are not backed by the government.

(b) - Include conforming and non-conforming loans (such as jumbo loans).

(c) - Make up more than 60 percent of the loans generated in the U.S. each year.

What is the difference between FHA, VA and USDA loans?

1 - FHA LOANS:

FHA loans, which are insured by the Federal Housing Administration, are typically designed to meet the needs of first-time homebuyers with low or moderate incomes. FHA loans can be approved with a down payment of as little as 3.5 percent and a credit score as low as 580.

FHA loans are often called “helper loans,” because they give a leg up to potential borrowers who may not be able to secure one otherwise. For this reason, FHA loans have maximum lending limits, which are determined based on housing values for the county where the for-sale home is located.

Because the agency is taking on more risk by insuring FHA loans, the borrower is expected to pay mortgage insurance both at the time of closing and on a monthly basis, and the property must be owner-occupied.

2 - VA LOANS:

VA loans are backed by the Department of Veterans Affairs and they are guaranteed to qualified veterans and active-duty personnel and their spouses. VA loans can be approved with 100 percent financing, meaning VA borrowers are not required to make a down payment.

Unlike FHA loans, borrowers do not have to pay mortgage insurance on VA loans.

3 - USDA LOANS:

You may also hear about USDA loans, which are backed by the United States Department of Agriculture mortgage program. USDA loans are intended to support homeowners who purchase homes in rural and some suburban areas. USDA loans do not require a down payment and may offer lower interest rates; borrowers may have to pay a small mortgage insurance premium in order to offset the lender’s risk.

What’s a conventional loan? Understanding what it means to be conforming and non-conforming

Buyers who have a more established credit history and a larger down payment may prefer to apply for a conventional loan. These loans may offer a lower interest rate and only require the home buyer to purchase monthly mortgage insurance while the loan-to-value ratio is above a certain percentage, so a conventional loan borrower can typically save money in the long run.

Conventional loans are divided into two types: Conforming loans and non-conforming loans.

1 - CONFORMING LOANS:

Conforming loans are those that meet (or conform to) predetermined standards set by Fannie Mae and Freddie Mac — two government-sponsored institutions that buy and sell mortgages on the secondary market. By selling the loans to "Fannie and Freddie," lenders can free up their capital and return to issue more mortgages than if they had to personally back every loan that they approve.

The main standard for conforming loans is that the amount borrowed must be under a certain amount; in Alaska, a single-family home loan must be under $647,200 in order to be considered conforming.

Properties with more than one unit have higher limits.

2 - NON-CONFORMING (JUMBO) LOANS:

But what happens if a borrower wants to borrow more than the Freddie- and Fannie-approved loan amount? In this case, they would have to apply for a “jumbo loan,” which is the most common type of non-conforming loan.

Because the lender cannot resell the jumbo loan (or any non-conforming loan) to Freddie Mac or Fannie Mae, jumbo loans are considered to be riskier than a conforming loan. To protect against this risk, the bank will typically require a higher down payment; the interest rate on a jumbo loan may also be higher than if the same borrower applied for a conforming loan.

What kind of rate should you choose?

Rate types: Fixed-rate vs. adjustable-rate mortgages.

In addition to the loan type you choose, you’ll also have to determine if you want a fixed-rate mortgage or an adjustable-rate mortgage (ARM). A fixed-rate mortgage has an interest rate that does not change for the life of the loan, so it provides predictable monthly payments of principal and interest.

An adjustable-rate mortgage typically offers an initial introductory period with a low-interest rate. Once this period is over, the interest rate adjusts periodically, based on the market index. The initial interest rate on an ARM can sometimes be locked in for different periods, such as one, three, five, seven, or 10 years. Once the introductory period is over, the interest rate typically readjusts annually.

Office 1229 E. Pleasant Run Ste 224, DeSoto TX 75115

Call :(713) 505-2280

Site: www.stevenjthomas.com

Owned and Operated by Thomas & Thomas Financial Group, LLC