In October 2024, Brenda and her husband from Dallas made what she now calls a “dumb, dumb, dumb decision.”
The couple took out a bridge loan at a staggering 10.99% interest to purchase a new property, expecting to sell their previous home quickly and pay off the short-term debt.
But nearly nine months later, the old house hasn’t sold — and the $1,437,000 loan for both properties has ballooned. Now, with the loan due date around the corner, the couple is panicking as foreclosure looms, and Brenda is hoping for some guidance from The Ramsey Show co-hosts George Kamel and Jade Warshaw.
Don’t miss
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 6 of the easiest ways you can catch up (and fast)
- Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
- Robert Kiyosaki warns of a ‘Greater Depression’ coming to the US — with millions of Americans going poor. But he says these 2 ‘easy-money’ assets will bring in ‘great wealth’. How to get in now
Reality hits as the market turns sour
“So apparently bridge loans — they explained to us — bridge loans are always high-interest, like this. They’re anywhere between eight and 12,” Brenda explained.
Shocked, Kamel exclaimed, “They even explained it to you, and you said ‘sign us up! Let’s do it,” with Brenda clarifying, “Well, that’s how confident we were that we could sell our old house.”
As to why their old property hasn’t sold? “That’s the million dollar question,” added Brenda.
The couple’s first home, a remodelled two-acre property listed at $995,000, has had the price knocked down a few times. It offers a country feel, with a Starbucks and other amenities just five minutes away. But the market has turned.
The couple now believes their pricing was too ambitious and that their home doesn’t match what local buyers want.
“I think people are looking for more palatial homes in that area [for that money],” Brenda said. “ And ours is an original; there’s a lot of new development out here, a lot of incentives.”
Though the couple’s old property is technically under contract with a prospective new buyer, the deal is contingent — the buyers must sell their own home first. Forty days into the agreement, there’s still no progress.
“They keep telling us, ‘The market is just so weird,’” Brenda said. “It’s a buyer’s market in Dallas, not a seller’s.”
How to pivot and invite new offers
The hosts identified that one of the issues is that the caller’s listing shows as “pending” on real estate platforms, deterring new offers. That detail drew criticism from Kamel and Warshaw.
Warshaw herself flagged that her advice should be coming from the couple’s realtor and not from a call-in show and that they need to act now.
Read more: You don’t have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here’s how
Warshaw advised, “[the agent] need[s] to change [the listing] to where it shows as totally open and active. That is 100%. My husband and I have done that. It’s possible to do that.”
The hosts also suggested the couple pressure their realtor or consider switching — despite the potential delays — if they’re not actively working to generate new offers and to add a reasonable deadline by which point an offer should be finalized or forfeited.
The financial stakes are enormous. The couple has $100,000 in savings, but that’s far from the amount needed to cover the loan if the sale falls through. And the bridge loan, which was meant to carry them for only a few months, now threatens to pull them under.
“Your house is the collateral,” Kamel warned. If the deal doesn’t close, the couple is looking at foreclosure.
Getting out of a bad deal
According to financial experts, borrowers stuck in bad bridge loan situations must act fast. Here are a few urgent strategies:
Renegotiate the loan: Brenda said her lender has been unresponsive, but experts say persistence is key. Lenders may be willing to extend the loan term, especially if a sale is close.
Keep the listing competitive Until the property is sold, ensure the listing remains active on all major platforms and continue to hold open houses.
Pressure the buyer: Set deadlines within the contingency contract to force movement, or allow the couple to move on to new offers.
Get professional help: A real estate attorney or financial advisor can help navigate negotiations and buy time.
Switch realtors if needed: If the current agent isn’t aggressive, consider a change — even if it delays relisting.
Ultimately, Brenda and her husband serve as a cautionary tale about the risks associated with bridge loans, particularly in volatile housing markets. This may be a time it’s advisable to sell your home first, before buying another property.
“ You gotta fight. Fight and claw your way out of this thing. Don’t go through foreclosure,” Kamel cautioned, “No more hard money loans.
What to read next
- Financial aid only funds about 27% of US college expenses — but savvy parents are using this 3-minute move to cover 100% of those costs
- Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid?
- Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
- How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
