Three Ways Texans Buy Before They Sell
Program and regulatory figures verified September 17, 2026. Details change; confirm your scenario with us.
There is no single right answer. Which structure fits depends on your equity, how fast your current house will move, and whether you would rather keep it.
1. Carry both, then recast
You close on the new house without needing the old one to sell, then apply the proceeds to the new loan once it does and re-amortise. This is the cleanest option and the one we reach for first when the numbers allow it, because it leaves you negotiating on the new house from a position of strength. Nothing about your offer depends on another transaction closing.
The requirement is that you qualify carrying both payments at once. That is an income and debt question, not a Texas question, and it is the first thing we check.
2. Bridge financing
Bridge financing uses the equity in your departing home to fund the new purchase, then retires when the sale closes. It is the textbook answer nationally. In Texas it is the option most constrained by the homestead rules, because anything secured by the house you still live in has to fit under the 80 percent ceiling alongside your existing mortgage, and a subordinate HELOC cannot go behind a Section 50(a)(6) loan.
That does not make it unavailable. It makes it something to size carefully and early, with the twelve-day floor built into the schedule. The mechanics are on how a bridge loan works, and the comparison people usually want is bridge versus a line of credit.
3. Keep it and rent it
If the departing house would rent for a reasonable number, the timing problem disappears. You are no longer waiting on a sale, you are adding an asset with income attached. Fannie Mae allows rental income on a principal residence being converted to an investment property, documented with a fully executed current lease and supported by a Single-Family Comparable Rent Schedule on Form 1007 for a one-unit property.
Texas is a friendlier state for this than most. There is no statewide rent control and no just-cause eviction requirement, so a landlord's position is comparatively strong. Whether it makes sense is a cash-flow question we can run in a few minutes. See the rental conversion page.
How we pick between them
| If this is true | Start here |
|---|---|
| Your income supports both payments | Carry both, recast after the sale |
| Equity is strong and the sale is close | Bridge financing |
| The old house cash flows and you like owning it | Rental conversion |
| The new house is above the conforming limit | The jumbo path |
Your real estate agent handles the purchase paperwork and the offer itself. We handle the money: what you qualify for, how the equity gets used, and what the payment looks like.
No obligation and no pressure. A short call with our team, your real numbers, and a straight answer on which of the three structures actually fits.
Frequently asked questions
Which buy-before-you-sell option is cheapest in Texas?
Usually carrying both and recasting after the sale, because you are not paying for a second piece of financing. It is also the option with the highest qualifying bar, since you have to support both payments. When that does not work, bridge financing and rental conversion are the alternatives, and which is cheaper depends on your equity and the rent the old house would command.
What is a recast?
You make a large payment against the principal after closing and the lender re-amortises the loan over the remaining term, which lowers the monthly payment. It is not a refinance: same loan, same term, smaller balance. For a move-up buyer it is the natural way to put sale proceeds to work once they arrive.
Is Texas a good state to keep a rental?
Comparatively, yes. Texas has no statewide rent control and no statewide just-cause eviction requirement, so a landlord has more room than in many states. That is one reason the rental conversion path gets used more here than it does in places with tighter tenant protections.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Texas homestead lending rules, property tax treatment, and loan limits change and depend on your facts; your real estate agent handles the purchase paperwork and your CPA or a Texas attorney handles legal and tax questions. Loans are subject to borrower and property qualification.