Buying a new home in Greenville before your current one sells can feel like a timing puzzle. You want to move on your next place without losing it, but you also want to sell well and avoid unnecessary stress. If you are weighing these trade-offs, a bridge loan could be the short-term tool that helps you connect the dots. In this guide, you will see what a bridge loan is, how it works in Greenville, common costs and terms, and practical steps to use it wisely. Let’s dive in.
Bridge loan basics in Greenville
Simple definition
A bridge loan is a short-term loan that gives you temporary financing between two events, such as buying your next home and selling your current one. It is also called interim financing, a swing loan, or a gap loan. Most residential bridge loans run for about 6 to 12 months and are designed to be paid off when your current home sells or when you refinance into long-term financing.
How bridge loans work
Most bridge loans for homeowners do one of three things:
- Let you use equity from your current home to fund the down payment on your next home.
- Secure the new purchase while you wait for sale proceeds to arrive.
- Coordinate both closings so the sale pays off the bridge loan right away.
Common structures include:
- Closed-bridge using your current home: The lender places a short-term lien on your existing property and lets you draw a portion of your equity for the new purchase.
- Open-bridge secured by the new home: The loan may be secured by the new property or by both properties and is paid off with your sale or refinance.
- Cross-collateralized with simultaneous closings: Your sale and purchase close back-to-back so sale proceeds pay the bridge loan immediately at the table.
Repayment can be interest-only each month with a balloon payoff at the end, or principal and interest depending on the lender. You need a clear plan for payoff, such as a signed purchase contract on your current home or a refinance path.
When a bridge loan makes sense
A bridge loan can be useful when you want to make a non-contingent offer in a competitive area of Greenville County or when your current home is under contract but the timing is off by a few weeks. It can also help if you need funds to finish a renovation before moving or refinancing. In short, it buys you time and flexibility.
It may not be the best fit if you lack equity, if your sale timeline is uncertain, or if carrying two payments would strain your budget. In those cases, a home equity line, a second mortgage, a contingent offer, or carefully coordinated simultaneous closings may be better options.
Costs and terms to expect
Bridge loans usually cost more than long-term mortgages. Rates vary by lender, your credit profile, and the collateral, and they can range from the mid-single digits to the low double digits. Fees can include origination, appraisal, title, and attorney fees. Many programs limit the combined loan-to-value across both properties, and it is common to see combined LTV limits below 80 percent.
Always review for prepayment terms. If your home sells quickly, you will want to know whether there are penalties or minimum interest charges. Understand the balloon payoff date and the total cash needed to close.
Eligibility and lender documents
You will qualify more easily if you have solid equity, good credit, and stable income. Lenders may be more flexible if you can show a clear exit plan such as a signed listing agreement, a pending sale, or a refinance strategy.
Be prepared to provide:
- Photo ID and Social Security number
- Current mortgage statements for your existing home
- Recent pay stubs, W-2s, or tax returns
- Sales contract for your purchase and a listing agreement or offer on your current home
- Recent appraisal or price opinion if available
- Proof of homeowner’s insurance
- Title documents for any property used as collateral
Many lenders will calculate a combined loan-to-value when both homes are involved. They will also evaluate your debt-to-income ratio and how the bridge loan affects your new mortgage approval.
The Greenville process and timeline
Bridge loans are built for speed once your file is complete. After you provide documents and the lender orders any needed valuation and title work, closings can be measured in days to a few weeks depending on lender capacity and attorney scheduling.
Closing practices to know in South Carolina
In South Carolina, closing attorneys are commonly involved in real estate settlements. You should plan early coordination among your lender, your real estate agent, and your closing attorney. Confirm how the bridge lien will be recorded and released in Greenville County and make sure payoff letters and any release documents are ready ahead of closing. Local title companies and closing attorneys routinely handle simultaneous closings, which can help you pay off a bridge loan the same day you sell.
Risks and how to manage them
Bridge loans solve timing issues, but they add risk. If your sale is delayed, you may face two mortgage payments and a balloon payoff date on the bridge. You also incur higher short-term costs than a standard mortgage. To manage these risks:
- Build a conservative budget that accounts for two payments for several months.
- Get your home market-ready early to shorten days on market.
- Ask about extensions and fees in case you need more time.
- Avoid overleveraging. Mind combined loan-to-value limits and keep a cash cushion.
- Keep your new mortgage lender looped in so your bridge loan does not derail final approval.
Alternatives to bridge loans
You have options if a bridge loan does not fit your situation:
- Home equity line of credit or second mortgage: Often lower cost with flexible draws. It may require more time and an appraisal.
- Sale contingency: Lets you avoid extra borrowing, but it is weaker in competitive areas and some sellers may not accept it.
- Simultaneous closings: Proceeds from your sale fund your purchase the same day. Timing must be precise, and there is risk if the sale falls through.
- Personal or 401(k) loan: Can be fast for smaller gaps, with limits and potential tax or retirement impacts.
- Rent-back or buy-before-sell arrangements: Provide move-in flexibility if all parties agree to terms and costs.
- Bridge-to-perm or construction-to-perm financing: For projects that require renovation or build phases with a permanent loan after completion.
Every alternative trades cost, speed, and risk differently. Compare scenarios side by side with your advisor.
A simple example
You find a home in Travelers Rest that fits your needs and want to act quickly. Your current home in Greenville is listed, and showings are strong, but you do not have a signed contract yet. A bridge loan secured by your current home lets you tap a portion of your equity for the down payment. You close on the new place, move in, and then pay off the bridge from your sale proceeds a month later. Your new long-term mortgage remains in place on the new property.
Quick checklist for Greenville buyers and sellers
- Define your exit plan. Will you repay from a sale, a refinance, or simultaneous closings?
- Map your timeline. Identify target closing dates and build in buffer time.
- Verify combined loan-to-value. Confirm how much equity you can access and what cushion the lender requires.
- Review costs and fees. Ask about origination, attorney, title, appraisal, and any prepayment terms.
- Coordinate early with your closing attorney. Line up payoff letters and lien release steps in Greenville County.
- Keep your new mortgage lender updated. Make sure the bridge loan is accounted for in underwriting.
- Watch market signals. Check current Greenville County reports from reputable local sources to gauge days on market and pricing trends.
Get local guidance and move with confidence
If you need to buy before you sell in Greenville, a bridge loan can give you the speed and certainty to move ahead. The key is a clean file, a conservative plan, and a local team that can coordinate your sale, purchase, and payoff with minimal friction. If you want integrated advice from a single partner that can handle brokerage and short-term financing under one roof, connect with The Arch Corporation to talk through your timeline, documents, and options.
FAQs
How long do Greenville bridge loans typically last?
- Most residential bridge loans run 6 to 12 months, depending on the lender and your exit plan.
Do bridge loans affect my new mortgage approval?
- Yes. The bridge loan can impact your debt-to-income ratio and loan-to-value calculations, so both lenders need to account for it.
How much equity can I access with a bridge loan?
- It varies by lender and profile, but many programs keep combined loan-to-value below 80 percent across the properties involved.
What happens if my home does not sell before the bridge loan is due?
- You may need an extension, a refinance, or to carry both payments; without a solution, there is risk of default, so plan conservatively.
Are bridge loan interest and fees higher than a standard mortgage?
- Generally yes. Bridge loans are short-term and typically come with higher rates and closing costs than long-term mortgages.
Who handles bridge loan closings in South Carolina?
- Closing attorneys commonly handle real estate settlements in South Carolina, and they can coordinate simultaneous closings and lien releases in Greenville County.
