Bridge Loans in Southern Crossing: How to Buy Before You Sell

Navigating the Southern Crossing Real Estate Market

If you have been keeping an eye on real estate in Bend, you already know that Southern Crossing is one of the most sought-after spots in town. With the Deschutes River winding right past and the shops and restaurants of the Old Mill District just a stone's throw away, homes here don't tend to sit on the market for long. It is a fantastic lifestyle, but that popularity creates a real hurdle for current homeowners looking to move in.

The biggest challenge isn't usually finding a home you love; it is getting your offer accepted when you still have a house to sell. In a fast-moving market like this, sellers often look right past offers that come with a "home sale contingency." They want certainty, and waiting for your current place to close adds risk they don't want to take. This is where a bridge loan becomes a powerful tool in your back pocket, helping you compete with cash buyers even if your equity is currently tied up in your old property.

What Is a Bridge Loan?

At its simplest, a bridge loan is exactly what it sounds like: a short-term financing tool that gets you from point A to point B. It is designed to span the gap between buying your new home in Southern Crossing and selling your current residence.

Instead of waiting for your house to sell to access your money, a bridge loan lets you tap into that equity immediately. These loans typically last for a short term—usually six to 12 months—and use your current home (or sometimes both properties) as collateral. This gives you the funds you need for a down payment on the new place right now, allowing you to secure the keys before you’ve even listed your old home.

Why Use Bridge Financing in Southern Crossing?

Strategic financing is often the difference between winning a bid and coming in second place. In neighborhoods near the Old Mill where inventory is tight, the terms of your offer matter just as much as the price.

Removing Contingencies

The main reason buyers use this strategy is to make a "non-contingent" offer. When you don't have to wait for your old home to sell, your offer looks almost as strong as cash to a seller. It removes the worry that your financing might fall through because of a hiccup with your own buyer, which can be a huge relief to a seller looking for a smooth transaction.

Speed and Convenience

Bridge loans are generally faster to close than standard mortgages, often wrapping up in two to three weeks. Beyond the speed, there is a massive lifestyle benefit: you avoid the nightmare of moving twice. You can close on the new house, move in at your own pace, and then stage your vacant old home to sell for top dollar without living in a construction zone or dodging showing requests during dinner.

Typical Costs, Rates, and Terms (2025 Outlook)

Convenience does come with a price tag, and it is important to go into this with your eyes open regarding the costs. Because these are short-term, specialized loans, lenders charge a premium for the flexibility they offer.

Interest Rates and Fees

You should expect interest rates to be higher than a standard 30-year mortgage. For the 2025 outlook, we are seeing rates often landing in the 9% to 11% range, depending on the Prime rate and your specific lender. Additionally, there are origination fees—often called "points"—which can run anywhere from 1.5% to 3% of the loan amount.

Monthly Cash Flow and Closing Costs

To make these higher rates manageable, many lenders structure the loan with interest-only payments. This keeps your monthly obligation lower while you own two homes. However, remember that you will be paying closing costs on both the bridge loan and your permanent mortgage for the new house. It is not the cheapest way to buy, but for many, the cost is worth it to secure a specific property in a competitive area.

Bridge Loans vs. Alternatives: What’s Best for You?

Before signing on the dotted line, it is smart to weigh this option against your other choices.

Vs. Home Sale Contingency

A contingency costs you nothing upfront, but in a hot market, it costs you the deal. If you are buying in a slower market, a contingency might work. But in Southern Crossing, relying on a seller to accept a contingency is risky. A bridge loan costs money but buys you the certainty of securing the house.

Vs. Home Equity Line of Credit (HELOC)

A HELOC often has lower rates than a bridge loan, which sounds great on paper. The catch is that many banks will freeze or deny a HELOC if they know you are about to list the home for sale. Bridge loans are specifically built for that exit strategy, whereas HELOCs are designed for long-term owners.

Vs. 401(k) Loan

Borrowing from your retirement is another route some buyers take. It usually carries a lower risk of foreclosure than a bridge loan since you are borrowing from yourself, but loan amounts are often limited. It might not provide enough cash if you have significant equity you need to unlock.

Qualifying for a Bridge Loan in Southern Crossing

Lenders take a careful look at your financials because they are taking a risk on you owning two properties at once. The requirements can be stricter than a standard purchase loan.

Equity is King

The biggest hurdle is equity. You can't just have a little bit of skin in the game; lenders typically want to see that you will still have 20–30% equity remaining in your old home after the bridge loan is accounted for. They will look at the Combined Loan-to-Value (CLTV) ratio, which is usually capped around 75–80%.

Credit and Income

You will generally need a strong credit score, usually north of 680 or 700, to qualify for decent terms. Debt-to-Income (DTI) ratios are also scrutinized. Some local lenders are flexible and can exclude your old mortgage payment from your DTI if you have a signed listing agreement, but others will count both mortgage payments against you until the old house sells. You also need a clear "exit strategy"—proof that your old home is marketable and priced to sell in the current market.

Questions to Ask Local Lenders

Not all lenders offer bridge products, and those that do have vastly different rules. When you are shopping for financing options in Bend, here are a few specific questions to ask:

• "Do you hold the loan in-house?" Portfolio lenders (those who keep the loan rather than selling it to investors) often have more flexibility with their rules.
• "Can you exclude my current mortgage payment from my DTI?" This is crucial if your income is tight when carrying two mortgages.
• "What is your average closing timeline for Southern Crossing properties?" You need to know if they can move fast enough to match the seller's timeline.
• "Are there prepayment penalties?" If your old house sells in 30 days, you want to be sure you won't be fined for paying the bridge loan off early.

Real-World Scenario: Moving to Southern Crossing

To see how this works in practice, let's look at a hypothetical example. Let's say "The Millers" currently own a home worth $600,000, and they have paid their mortgage down so they have $400,000 in equity.

They find their dream home in Southern Crossing listed for $800,000. To avoid a contingent offer, they take out a bridge loan against the $400,000 equity in their current house. They use $160,000 of that cash to make a strong 20% down payment on the new home.

The result? They move into the Southern Crossing home immediately. Once they are settled, they stage their old house, which sells quickly. The proceeds from that sale pay off the bridge loan entirely, and they are left with just the standard mortgage on their new river-adjacent home.

Frequently Asked Questions

How fast can I get a bridge loan in Southern Crossing?

Bridge loans can often be funded much faster than conventional mortgages, typically within two to three weeks. Because speed is a primary motivator for using this product, lenders who specialize in bridge financing prioritize quick underwriting to help you meet aggressive closing dates.

Do I have to make monthly payments on a bridge loan?

It depends on the lender. Some require monthly interest-only payments to keep your costs lower during the transition. Others may allow you to defer interest payments completely until the loan is paid off, though this means you will have a larger lump sum due when your old house sells.

Can I use a bridge loan for a down payment?

Yes, this is the most common use for these loans. You extract equity from your current home to fund the down payment on the new one, allowing you to secure a conventional mortgage for the remainder of the purchase price without needing to sell first.

What happens if my old home doesn't sell within the term?

This is the primary risk. If your home hasn't sold by the end of the term (usually 6 to 12 months), you are still responsible for paying off the loan. In this worst-case scenario, you might need to extend the loan (if the lender allows), lower your asking price aggressively, or refinance the bridge loan into a different long-term financing product.