How to Use a "Bridge Loan" to Secure Your DFW New Build Before Your Current House Sells

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A bridge loan allows you to purchase a new construction home while your current home is still on the market by using your existing equity as collateral. In Dallas–Fort Worth, this enables you to make a non-contingent offer, which builders often prioritize for their guaranteed closing dates. While these loans carry higher interest rates—typically around 8.49% to 12.99% in early 2026—they provide the speed and flexibility needed to act quickly on high-demand properties without the need for temporary housing.

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1. How a Bridge Loan Works for DFW New Builds

A bridge loan is a temporary financing solution, usually lasting 6 to 12 months.

• Equity Access: You can typically borrow up to 80% of your current home's value.

• Lump Sum Funding: Unlike construction draws, bridge loans are usually paid out in a lump sum at closing.

• Fast Approval: In a competitive market, these loans can be approved in as few as 72 hours and funded within 2 weeks.

2. Why Builders Prioritize Non-Contingent Buyers

Builders in North Texas favor certainty.

• Closing Confidence: A bridge loan eliminates the home sale contingency, making your offer as strong as a cash buyer's.

• Timeline Alignment: Builders have strict production schedules; a bridge loan ensures you can close precisely when the home is finished, regardless of when your old home sells.

3. The Costs: Interest Rates & Fees

Because bridge loans are short-term and higher risk for the lender, they come at a premium.

• Interest Rates: Expect rates roughly 2% above the prime rate. Current 2026 rates for residential bridge products in Texas often range from 8% to 12%.

• Closing Fees: Expect to pay between 1.5% and 3% of the loan amount in closing costs, including appraisals and origination fees.

• Payment Flexibility: Many lenders offer interest-only payments or may even defer payments entirely until the home sells, easing your monthly cash flow.

4. Qualification Requirements

Securing a bridge loan in 2026 requires a solid financial profile:

• Substantial Equity: Most lenders require at least 20% to 30% equity in your current home.

• Credit Score: A favorable credit score, typically above 650 to 700, is required for the best rates.

• Exit Strategy: Lenders will demand a clear plan for repayment, usually the finalized sale of your current property.

5. Neighborhood Spotlights: Where Timing is Key

• DeSoto & Midlothian: In high-demand areas where new phases sell out quickly, a non-contingent offer via a bridge loan can be the only way to secure a preferred lot.

• Red Oak & Glenn Heights: As inventory grows, builders may accept contingencies, but a bridge loan buyer often gets the best incentives and "spec" home pricing.

Conclusion

A bridge loan is a powerful tool for DFW buyers who have found their dream new build but are stuck behind a home sale. While it is a more expensive option than traditional financing, the ability to buy without a contingency provides unmatched peace of mind and competitive leverage with builders. It allows you to focus on your move rather than the stress of a perfectly timed double-closing.

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Key Takeaways

• Non-Contingent Power: Make an offer that builders can't refuse by removing the home sale requirement.

• Speed to Close: Get approved in days to secure a fast-moving "spec" home.

• Leverage Your Equity: Tap into up to 80% of your current home's value for your new down payment.

• Higher Rates: Plan for interest rates roughly 2% higher than standard 30-year mortgages.

• Move Once: Avoid the hassle and cost of temporary rentals by moving directly into your new build.

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