Buying your next home in Matthews before selling your current one can feel like a high-wire act. You want the right house, the right timing, and a smooth transition for your family. If you are in 28105 and eyeing a move-up, bridge financing may give you the flexibility to act with confidence. In this guide, you’ll learn what a bridge loan is, how it works in Matthews, the costs and risks, smart alternatives, and a step-by-step plan to move on your timeline. Let’s dive in.
What a bridge loan is
A bridge loan is a short-term loan that helps you buy your next home before you sell your current one. Many move-up buyers use it to fund the down payment on the new home or to cover payments while their current home is on the market.
Most bridge loans have short terms, often 6 to 12 months. Payments are commonly interest only while the loan is outstanding. Rates and fees are usually higher than a standard mortgage, and the loan is often secured by your current home.
Common bridge options
- HELOC as a bridge: You open a home equity line of credit on your current home before listing. You draw funds for your down payment, then repay the balance when your sale closes.
- Home equity loan or second mortgage: A fixed, short-term loan secured by your current home. Funds are disbursed as a lump sum.
- Lender bridge loan: A standalone short-term loan offered by some mortgage lenders to plug the gap between buying and selling.
- Simultaneous-close bridge: The lender funds your purchase and is repaid when your current home closes the same day. This requires tight coordination.
- Private or hard-money bridge: Faster and more flexible, but higher cost. Generally a last resort.
What lenders often look for
- Equity: Many lenders want significant equity in your current home. Some cap the combined loan-to-value around 70 to 80 percent. Requirements vary.
- Credit and income: Expect income and credit verification similar to a mortgage, though private lenders may be more flexible.
- Documentation: Be prepared to provide mortgage statements, tax returns and pay stubs. Some lenders may ask for proof your home is listed or recent market analysis.
How it works in Matthews (28105)
In Matthews, most purchase closings take about 30 to 45 days for a conventional loan. Once your current home is under contract, sale closings often range from 30 to 60 days. Bridge loans generally carry a 6 to 12 month term, and some lenders charge an extension fee if you go past that window.
Common move-up scenarios
- Buy first, sell second: You use bridge funds for your down payment and closing costs on the new home. You list your old home right away and aim to sell within the bridge term.
- Simultaneous close: Your lender advances funds at your new purchase closing and is repaid at the sale closing on the same day. This is possible with strong coordination among the lender, attorneys, and title.
- HELOC pre-listing: You open the HELOC before listing to create liquid funds for the purchase. You repay the line once your sale proceeds arrive.
- Contingent offer plus bridge: You make an offer contingent on selling your current home, then add a bridge as a backup or to strengthen your position if timelines shift.
Timing around the school year
Many Matthews households plan moves around Charlotte-Mecklenburg Schools schedules. To reduce disruption, aim for closings during summer break if you can. Start conversations with your agent and lender 2 to 4 months before your ideal move window, so you can pace listing prep, showings, and underwriting. If timelines get tight, consider a seller rent-back as an alternative to buying before selling.
Costs and risks to weigh
Bridge loans can be helpful, but you need a clear plan for costs and risk.
Financial costs
- Interest: Bridge loans often carry higher rates than permanent mortgages. HELOC rates are usually variable and tied to prime.
- Fees: Expect origination, appraisal, closing costs, and possibly an extension fee if the sale runs long.
- Cash flow: If your current home does not sell fast, you may carry payments on the new mortgage plus the bridge and your existing mortgage. This can strain reserves.
Market and timing risks
- Inventory and pricing: If the Matthews market softens or days on market stretch, your sale price may be lower than expected, which can affect your ability to repay the bridge.
- Appraisal differences: Lenders may use conservative valuations. If your list price is above the lender’s value, your bridge amount could be smaller than planned.
- Default risk: Because your current home often secures the bridge, failure to repay may put that home at risk.
Operational and contractual risks
- Coordination: Simultaneous closings require careful scheduling among lenders and title. Delays can ripple across both transactions.
- Payoff terms: Ask about prepayment penalties and whether the loan is recourse or non-recourse. Many bridges are recourse loans.
- Tax treatment: Interest deductibility can depend on how funds are used and current tax rules. Consider consulting a tax professional for personal guidance.
Alternatives to compare
Several strategies can help you move without taking a traditional bridge loan. You can also mix and match.
Sale contingency on your purchase offer
- Pros: Avoids carrying two homes.
- Cons: Less competitive in low-inventory conditions.
Coordinated simultaneous closings
- Pros: Minimizes bridge exposure.
- Cons: Requires precise timing and strong coordination.
HELOC or home equity loan on current home
- Pros: Faster access to funds, flexible draws for HELOCs.
- Cons: Variable rates for HELOCs and a new lien on your current home.
Cash-out refinance on current home
- Pros: Can provide a larger lump sum if terms make sense.
- Cons: Refinance costs and a new mortgage structure to consider.
Savings or family assistance
- Pros: Low or no interest cost.
- Cons: Not available to everyone and can carry personal risk.
Private or hard-money bridge
- Pros: Fast and flexible.
- Cons: Highest cost and typically a last resort.
Seller rent-back after you sell
- Pros: Lets you close your sale and remain in place for a set period, which can help with school-year timing.
- Cons: Requires buyer agreement and careful leaseback terms.
Local closing notes for Mecklenburg County
- Closing costs and fees: North Carolina does not have a statewide real estate transfer tax in the form some states use. Plan for standard closing costs, recording fees, lender fees, and title services. Your closing attorney or title company will provide a detailed estimate.
- Property taxes: Mecklenburg County property taxes are billed on a set schedule. Prorations at closing are standard. Confirm exact timing with the county tax office during your planning.
- School coordination: If you are moving within or into 28105, review Charlotte-Mecklenburg Schools calendars and enrollment timelines as you plan closing dates and move logistics.
Is a bridge right for you?
A bridge can be a helpful tool if you need to buy quickly, want to make a strong non-contingent offer, and have solid equity in your current home. It may not be the best fit if your budget is tight or if your home’s sale timeline is uncertain.
When a bridge may fit
- You have 20 to 40 percent equity or more in your current home.
- Your family needs to align with school calendars or a job start date.
- You want to make a competitive offer without a sale contingency.
- You have reserves to cover two mortgages for several months if needed.
When to explore alternatives
- You prefer lower carrying costs and can time a simultaneous close.
- Your equity is limited or your home may take longer to sell.
- You are rate sensitive and prefer a HELOC or savings approach.
Lender conversation checklist
Set yourself up for clear decisions and fewer surprises by asking focused questions and preparing documents early.
Questions to ask lenders
- Which bridge options do you offer, and what are the term and extension policies?
- What are the rates, and are they fixed or variable? How do they compare to my new mortgage rate?
- What are all fees and closing costs, including appraisal and any extension or prepayment fees?
- What equity or combined loan-to-value do you require, and how will you determine my home’s value?
- Is the loan recourse or non-recourse? How are payments structured?
- How fast can you fund once approved? Can you coordinate a simultaneous close?
- What documentation is required, and what is the underwriting timeline?
- How does the bridge interact with my existing mortgage, including any due-on-sale clauses?
- Are there tax implications I should consider?
Documents to prepare
- Recent mortgage statements for your current home.
- Deed or title information if available.
- Recent pay stubs, W-2s, and tax returns.
- Listing agreement or a broker price opinion if your home is on the market.
- Bank and asset statements for reserves.
- Details of your new purchase contract if you are under contract.
Negotiation and timing with your agent
- Target a closing window that aligns with the school calendar, with buffer time in your bridge term.
- Consider a seller rent-back if you need extra time after closing.
- Ask your lender for clear payoff language for simultaneous close scenarios.
- Stress test your plan with a conservative sale price and longer days on market to ensure reserves are sufficient.
A sample move-up timeline
- Weeks 1–2: Meet with your agent to review pricing and a marketable listing plan. Talk with a lender to pre-qualify for a bridge and confirm your budget.
- Weeks 3–4: Prep your home and list. Begin searching for the new home in Matthews and nearby South Charlotte suburbs.
- Weeks 5–8: Go under contract on your purchase. Finalize bridge underwriting and confirm closing date targets.
- Weeks 9–12: Aim to go under contract on your current home. Coordinate closing dates to allow a comfortable margin before the bridge term ends.
- Closing week: Execute a simultaneous close if possible, or close on the new home first with bridge funds. If needed, arrange a short rent-back.
- Post-close: Repay the bridge from sale proceeds, finalize moving and school enrollment steps.
Your next steps
- Get a current valuation and secure a bridge pre-qualification to understand borrowing capacity and terms.
- Align pricing, staging, and timing with your agent for a fast, marketable listing.
- Plan closing dates with the school calendar in mind, building a 2 to 4 week cushion.
- Outline contingency plans for reserves, rent-back, or extensions if timelines slip.
If you are weighing a bridge loan in 28105, you do not have to navigate it alone. For a tailored plan that fits your timeline, budget, and family needs, connect with Ashley & Scott Sofsian. We will guide your move-up strategy with clear steps and white-glove support from preparation through closing.
FAQs
How long do bridge loans last?
- Most bridge loans run 6 to 12 months, and some lenders offer extensions for an added fee. Confirm the maximum term and extension policy upfront.
Will a bridge loan affect qualifying for my new mortgage?
- Lenders look at your total debt-to-income and reserves. Some count bridge payments in qualifying, while others use interest-only structures. Pre-approval is essential.
Is bridge loan interest tax deductible?
- Possibly, if the loan is secured by and used to buy a qualified home. Tax rules change, so consult a tax professional for your situation.
Is a HELOC cheaper than a formal bridge loan?
- Often, HELOCs have lower upfront costs and flexible draws but variable rates. Formal bridge loans may carry higher rates and fees with more structured terms.
What if my old home does not sell in time?
- You may need to request an extension, refinance the bridge, adjust your sale price, or consider other options. Failure to repay can present foreclosure risk. Plan for reserves.
How should Matthews families time a move around school?
- Start planning 2 to 4 months before your target move. Many households aim for summer closings to minimize school disruption. A short rent-back can also help if dates do not align.
