What is a Bridge Loan?

A bridge loan is a short-term financing option used by borrowers until they secure long-term, permanent financing. It provides interim funding to cover immediate financial needs.

How are Bridge Loans Utilized?

In Texas, bridge loans are commonly used in real estate transactions, allowing homeowners to purchase a new home before selling their current property. They also serve as a valuable financial tool for commercial property and residential real estate investments.

What Are the Key Benefits of Bridge Loans?

Flexibility: Bridge loans offer flexibility in real estate transactions, enabling swift purchases and smooth transitions between properties.

Quick Approval: They provide rapid access to capital, often with faster approval processes compared to traditional loans.

Unlocking Home Equity: Homeowners can leverage bridge loans to unlock the equity in their existing properties for new purchases.

What Are the Typical Loan Amounts and Rates in Texas?

Loan Amount: In Texas, the average bridge loan amount is approximately $354,809, catering to diverse real estate investment needs.

Interest Rates: The mean interest rate for bridge loans in Texas is 10.9%, reflecting the current lending landscape.

Who Provides Bridge Loans in Texas?

Several lenders in Texas offer bridge loans, ranging from private lenders specializing in residential properties to financial firms with expertise in commercial real estate financing.

Not all bridge loan lenders are the same. At LJC Financial our bridge loans offer immediate cash flow to support your current obligations and are particularly popular among Houston real estate investors who are looking to flip properties. As a bridge loan lender, we strive to provide you with the funding you need without exposing you to undue risk.

What Are the Common Use Cases for Bridge Loans?

Bridge loans are commonly utilized for:

  • Financing real estate purchases before selling an existing property.
  • Facilitating commercial real estate projects, including development and renovations.
  • Providing short-term capital for immediate financial obligations related to real estate investments.

How Do Bridge Loans Work in Texas?

Bridge loans also known as swings loans, interim financing, or gap financing, “bridge” the gap during times when financing is needed but not yet available. These loans are customizable for different situations. Borrowers use the home or the equity in it as collateral for the loan until they can find something more long-term. In the house-flipping world, swing loans allow buyers to purchase multiple properties during the same period and work on them. It also allows them to hold multiple properties while they are waiting to sell them.

What Are the Eligibility Criteria for Bridge Loans in Texas?

It’s important to note that bridge loan eligibility criteria may vary among lenders, and borrowers should contact reputable financial institutions to understand specific qualification requirements tailored to their circumstances.

Equity Requirement: Borrowers typically need to have 20% or more equity in their property for a bridge loan to be a viable option.

Property Value: Lenders often extend bridge loans to properties with sufficient equity, emphasizing the value of the underlying collateral.

Credit Score and Financial Documentation: While some lenders may require good credit scores and proof of income similar to traditional loans, others may offer bridge loans based on different underwriting standards and flexibility. 

LJC Financial does not consider your credit score! Our hard money loans are primarily determined by the value of your property. This allows us to provide you with a financing solution that is based on the value of your assets rather than your credit history.

Loan Types: Eligible loan types for bridge loans in Texas may include purchase, refinance, and cash-out refinance for investment properties.


How to Apply for a Bridge Loan in Texas?

Borrowers looking for a Texas bridge loan should consult with reputable lenders, assess their financial needs, and gather relevant documentation unique to the real estate transaction at hand.

LJC Financial is a hard money lender based in Houston, Texas. Founded in 2007, we have provided millions of dollars in loans to real estate investors who have improved properties, stabilized neighborhoods, created jobs, and built wealth. When banks say no, we say yes with our straightforward and transparent lending process. Get in touch today to start making smarter financing choices.

How Can I Learn More About Bridge Loans in Texas?

For further information and personalized guidance on bridge loans in Texas, contact LJC Financial. We are a direct hard money lender – not a broker. LJC Financial can give you a “go/no go” decision quickly or advise you on what it will take to get your project funded. Our Texas loan professionals have real estate investor experience and know what it takes to be successful in today’s competitive market. We keep you moving toward closing by using common-sense underwriting and making quick decisions. An experienced loan professional is always available throughout the entire underwriting and closing process. We are committed to your success.

Why Choose a Bridge Loan Over Conventional Bank Financing?

Choosing a bridge loan over conventional bank financing provides advantages such as speed, flexibility, and the ability to secure funding during transitional periods. Bridge loans are designed to bridge short-term financial needs and offer faster application, approval, and funding processes than traditional loans. Learn more about the differences between bridge loans and traditional loans for real estate opportunities in Houston Texas. 

How Are Texas Bridge Loans Repaid?

Residential bridge loans generally do not carry prepayment penalties, while those intended for investment purposes may entail prepayment penalties or mandatory minimum interest payments. It is important to communicate with the lender about the specific terms of the loan.

Failure to repay a bridge loan can potentially result in default or foreclosure, causing harm to the borrower’s credit score. Usually, the repayment of a bridge loan involves selling the property or refinancing it. 

What Are the Upfront Costs of Bridge Loans?

Bridge loans might have initial costs including loan origination fees, processing fees, appraisal fees, and other miscellaneous fees. These fees differ among various bridge loan lenders. It is essential to understand the lender’s charges before finalizing a specific loan. In certain scenarios, the fees can be included in the loan amount, eliminating the need for out-of-pocket expenditures.

Are There Closing Fees for Bridge Loans?

Typically, the closing costs for bridge loans include loan origination fees, title insurance, escrow, notary, and recording fees. The specific expenses can vary depending on the lender, property location, loan amount, and the intricacy of the transaction. It is necessary to carefully examine the loan terms and engage in discussions about the closing costs with the lender before initiating the bridge loan process.

What is the Minimum Credit Score Required for a Bridge Loan?

The minimum credit score required for a bridge loan can vary significantly among different lenders. Some lenders may offer bridge loans to individuals with credit scores as low as 500, while others may have higher requirements, such as a minimum credit score of 620, 650, or even 680. Some lenders may not have a strict minimum credit score requirement but rather focus on other factors such as debt-to-income ratio and the overall financial situation of the borrower. 


At LJC Financial our hard money loans are primarily determined by the value of your property. This allows us to provide you with a financing solution that is based on the value of your assets rather than your credit history.