San Antonio Bridge Loans: How to Unlock Home Equity to Buy Before You Sell
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Cheyenne Wiseman Associate EditorClose
Cheyenne Wiseman Associate EditorCheyenne Wiseman is an Associate Editor at HomeLight.com. Previously, she worked as a writer for Static Media (Mashed.com and Chowhound.com) and as an editor for CBR.com. Cheyenne holds a bachelor’s degree in English from UC Davis, where she also founded and led a literary magazine called Open Ceilings. She has four years of experience writing and editing on topics including real estate, financial advising, and pharmaceuticals.
Selling your current home while buying a new one can feel like a juggling act. Coordinating both transactions at the right time, especially in a competitive market like San Antonio, isn’t always easy.
When available homes are limited and buyer demand is strong, it may seem like your only choice is to sell first and move into temporary housing while searching for your next place. Fortunately, there’s another path that can help you avoid a double move.
For some homeowners, San Antonio bridge loans provide a way to buy a new home before their current one sells. This type of short-term financing can offer added flexibility and more control over your moving timeline. In this guide, we’ll explain how bridge loans work, their potential benefits and drawbacks, and what to know before pursuing a bridge loan in San Antonio.
Yes, You Can Buy Before You Sell. Why Move Twice?
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
What is a bridge loan, in simple words?
A bridge loan is a short-term financing option that helps you buy a new home before your current one has sold. It lets you tap into the equity you’ve built in your existing home to access funds for a down payment, closing costs, or other purchase-related expenses.
Because bridge loans are designed to provide quick access to cash, they typically come with higher costs than a traditional mortgage. Still, many San Antonio homeowners find the added flexibility worthwhile, especially when trying to avoid a rushed sale or temporary living arrangements.
Bridge loans may also be referred to as:
- bridge financing
- bridging loan
- interim financing
- gap financing
- swing loans
How do San Antonio bridge loans work?
One common situation where a bridge loan can help is when you’ve found a new home in San Antonio but haven’t yet sold your current property. In that case, you can use the equity in your existing home to fund the down payment and closing costs on your next purchase.
In many cases, the lender providing your new mortgage may also offer a bridge loan. They often require your current home to be listed for sale and typically structure the loan with a term of six months to one year.
To determine whether you qualify, the lender may review your debt-to-income ratio using your current mortgage payment, proposed new mortgage payment, and any bridge loan obligations.
If your existing home is already under contract and the buyer’s financing is fully approved, the lender may only consider your new mortgage payment. This can help demonstrate that you’ll be able to manage your finances if your current home takes longer than expected to close.
What are the benefits of a bridge loan in San Antonio?
Here are a few ways San Antonio bridge loans can help make your move smoother:
- Stronger purchase offers: You may be able to submit a non-contingent offer, which can be more attractive to sellers.
- One move instead of two: Avoid the expense and inconvenience of temporary housing and storage.
- More time to prepare your current home: Move out first, then focus on repairs, cleaning, and staging.
- Potential payment flexibility: Some bridge loan programs don’t require payments until your current home sells.
- Ability to move quickly: You can pursue the right property without waiting for your existing home to close.
What are the drawbacks of a bridge loan?
While bridge loans offer flexibility, they also come with some potential downsides:
- Higher borrowing costs: You may pay origination fees, underwriting fees, and other closing costs.
- More financial obligations: You could be responsible for two mortgage payments plus a bridge loan at the same time.
- Stricter qualification requirements: Lenders often have tighter underwriting standards than they do for conventional mortgages.
- Longer approval process: Depending on the lender and your circumstances, underwriting may take longer than anticipated.
When is a bridge loan a good solution?
A bridge loan isn’t the best fit for every homeowner, but it can be useful in situations where timing is especially important.
You might consider a bridge loan if:
- You need the equity from your current home to make the down payment on your next one.
- Covering the cost of a double move or temporary housing isn’t practical.
- You’ve found a home you love and want to act quickly before another buyer does.
- A home sale contingency has made your offers less competitive.
- Preparing, staging, or showing your home while living in it would be difficult, and you’d prefer to move out first.
What’s required to get a bridge loan in San Antonio?
While requirements vary by lender, you’ll typically need the following to qualify for a bridge loan:
- Sufficient income: The lender will evaluate your ability to handle payments associated with your current mortgage, new mortgage, and bridge loan.
- Adequate home equity: Most lenders require at least 20% equity in your current home, though some may require significantly more.
- Strong credit: A credit score above 650 is often preferred and may help you secure better rates and terms.
- A home listed for sale: Some lenders require evidence that your current property is actively on the market before approving a bridge loan.
How much does a bridge loan cost in San Antonio?
Below is an example of the costs for a $200,000 bridge loan, along with possible fees.
You find a home you’d like to purchase, but you’re still waiting for your current San Antonio house to sell. The new home’s asking price is $400,000. You can only come up with $200,000, but you have at least another $200,000 worth of equity in your current property. You want to access that money to cover the shortfall before your new home is sold to another buyer.
| Net loan amount | $200,000 | $200,000 |
| Interest (varies) | 10% (example for 6 months) | $10,000 |
| Origination fee | 1.5% | $3,000 |
| Underwriting fee | $1,000 | $1,000 |
| Appraisal fee | $700 | $700 |
| Closing cost* | 2% | $4,000 |
| Total repayable amount | $218,700 |
*These closing costs typically range between 1.5%-3%
What's Your Current Home Worth?
As you make plans to buy a new home, get a value estimate on your current house from HomeLight for free. Our tool analyzes records of recently sold homes near you, your home’s last sale price, and other market trends to provide a preliminary range of value in under two minutes.
Who provides bridge loans in San Antonio?
Due to the underwriting demands for this type of loan, few institutions in San Antonio offer bridge loan products. If you’re interested, you may want to check with several different lenders before applying. The most common sources include:
- Your mortgage lender
- Local banks
- Credit unions
- Hard-money lenders
- Non-qualified mortgage (non-QM) lenders
Are there alternatives to San Antonio bridge loans?
A bridge loan isn’t the right fit for every homeowner. Fortunately, there are several other ways San Antonio buyers can access funds for their next home purchase:
- Home equity loan: Also known as a HEL, this type of loan lets you borrow against the equity in your current home. While the interest rate may be higher than the rate on your primary mortgage, you can leave your existing mortgage untouched and borrow only the amount you need.
- Home equity line of credit (HELOC): A HELOC also allows you to tap into your home’s equity, but instead of receiving a lump sum, you get a revolving line of credit that you can draw from as needed. HELOCs often offer relatively competitive rates, though they typically come with adjustable interest rates. Some lenders may also charge an early closure fee if you pay off the line shortly after opening it.
- Cash-out refinance: With a cash-out refinance, you replace your current mortgage with a larger one and receive the difference in cash. Rates are generally lower than those associated with bridge loans but may be higher than standard refinance rates. This option won’t work for everyone, however. For example, occupancy requirements could limit how quickly you can use the proceeds to finance another owner-occupied home.
- 80-10-10 (piggyback) loan: This strategy, often called a piggyback loan, combines a first mortgage and a second mortgage to help fund a home purchase with as little as 10% down. It can help buyers avoid private mortgage insurance, but you’ll likely be carrying the costs of your current mortgage plus two new loans until your existing home sells.
- 401(k) loan: If your retirement plan allows it, you may be able to borrow up to $50,000 from your 401(k). While this can provide access to cash without a traditional lender, repayment periods are typically short and monthly payments can be substantial. Those payments may also affect your ability to qualify for a new mortgage.
Are there modern ways to buy a house before I sell?
Today’s real estate technology has created new alternatives to traditional bridge loans. Programs such as HomeLight’s Buy Before You Sell help homeowners purchase their next home before selling their current one, often with a more streamlined experience.
Working alongside your San Antonio real estate agent, HomeLight can help you unlock a portion of your existing equity so you can move forward with confidence. The goal is to make buying and selling at the same time less stressful while helping you maximize the value of your current home.
Other companies offering buy-before-you-sell or home trade-in programs include Knock, Orchard, Flyhomes, and Homeward.
How does HomeLight Buy Before You Sell work?
Here’s how HomeLight’s Buy Before You Sell program works for home sellers in San Antonio:
- Apply in minutes with no commitment: Find out if your home is a good fit for the program and get your equity unlock amount approved in 24 hours or less. No cost or commitment necessary.
- Buy your dream home with confidence: Once you’re approved, you’ll have access to a portion of the equity in your current home. You can submit a competitive offer with no home sale contingency at any time, no matter how long it takes to find your dream home. The program’s near-instant Equity Unlock Calculator lets you estimate how much equity we can unlock from your current property.
- Sell your current home with less stress: After you move into your new home, we’ll list your unoccupied home on the market to attract the strongest offer possible. You’ll receive the remaining equity after the home sells.
Benefits of HomeLight Buy Before You Sell
- Flexible timelines: There’s no need to perfectly align sale and purchase dates. This program gives you breathing space to plan your move without feeling rushed.
- Financial peace of mind: Forget the stress of potential double mortgages or dipping into savings to bridge the gap between homes.
- Stronger buying position: In a seller’s market, a non-contingent offer can stand out, increasing your chances of landing your dream home.
- Sell for up to 10% more: Once you’ve moved out, your previous home can be listed vacant and potentially staged, which HomeLight transaction data suggests may help some sellers achieve a higher sale price.
For San Antonio homeowners caught in the buy-sell conundrum, HomeLight’s Buy Before You Sell program offers a convenient, low-hassle solution. Learn more details at this link.
HomeLight also offers other services for homebuyers and sellers in San Antonio, such as Agent Match to find the top-performing real estate agents in your market, and Simple Sale, an easy way to receive a no-obligation, all-cash offer to sell your home in as little as 7 days.
You might also try HomeLight’s Net Proceeds Calculator as you plan your home sale.
A creative financing solution for San Antonio homeowners
In a fast-moving market like San Antonio, buying a new home before selling your current one can be challenging. A bridge loan can help by giving you access to your existing home equity, allowing you to move forward with a purchase before your sale is complete.
While bridge loans offer flexibility, they also come with additional costs and qualification requirements. Depending on your situation, alternatives such as a HELOC, home equity loan, or a program like HomeLight’s Buy Before You Sell may be worth exploring.
Before deciding, consider speaking with a real estate professional to compare your options and determine which approach best fits your goals. HomeLight can connect you with a top San Antonio buyer’s agent who has experience helping clients use bridge loans.
Editor’s note: As a friendly reminder, this post is intended for educational purposes, not financial advice. If you need assistance with using San Antonio bridge loans, HomeLight encourages you to reach out to your own advisor.
Header Image Source: (Matthew Lejune/Unsplash)
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