My wife and I are about to sell our house, and buy a larger/more expensive home. Both our current home and future target area are hot markets, and expect homes to go quick in both locations. We plan to use a significant amount of equity from our current home as a down payment on the new home to keep our payments low. Given the pace of the market thought, I'm nervous about trying to arrange the closings just right to make the timing of down payment transfer work.

I've started looking into bridge loans or home equity lines of credit. Admittedly, this is new to me, but ideally, we'd like to buy our new home with a down payment of cash and a line of credit, make a few improvements before we move in, and then list our current home 30-60 days letter, with the expectation it would sell quickly. We'd then pay off the line of credit with the profit of the new home. I think ultimately we'd have about 50% equity in the new home, mostly from the proceeds of the sold home, so the line of credit would need to be pretty large, but very short term.

I've never done this before and looking for any advice or pitfalls I should avoid. Thanks!

Why would you even chance some problem?
If both markets are as hot as you say, sell your current home first, and live in a short term rental for a time, until you've had the opportunity to really look around and research what you want in your new locale.
You have a better chance of getting close to exactly what you want, with no pressure, and no stress about money.

I'd strongly prefer not to move twice since we have a 2 year old, and I imagine a short term rental that works for us will be difficult to find.

We've got a very good idea where we want to buy, assuming the right house comes along.

We offer bridge loans. Everyone situation is different so there is not really a one size fit all. My email is my user name here, if you want to shoot me an email with a thumbnail of your situation I can try to put together something for you.

More info here as well: hurstlending.com/residential-bridge-loans/

Harrier, you are correct in that it is not for everyone and does contain some level of risk, but at the end of the day a bridge loan will be a lot cheaper option then moving twice and a short term rental not too mention the convenience factor.

Go to the bank and get an unsecured personal line of credit. It's super cheap debt and really quick to get access to as there isn't a ton of paperwork since it's unsecured. Once you sell your current home, pay off the line and put the rest of the equity in your new home. Not sure where you are located but I work for Frost Bank and we are all over Texas. While I handle commercial relationships, I would be happy to introduce you to a banker here that specializes in personal lines of credit/HELOCs. Feel free to send me a PM and we can discuss further