The most obvious first step is to prepare a budget and although it may not be everyone’s Idea of fun it is nevertheless necessary if you are to take first step towards overcoming your financial situation. Have you seriously considered preparing a budget? Not just a mental note but a written exercise taking a long, cold, hard and truthful look at your predicament.

It may sound a very obvious statement to make but first step toward taking control of your financial situation, is to do a realistic assessment of how much money you earn and how much money you spend. The operative word here being “realistic.” It may not be pleasant to be so forthright about your own circumstances but if you choose to ignore certain aspects then you are just deceiving yourself and whole exercise would become a complete waste of your time.

Start by taking a blank piece of foolscap paper and divide it into two halves by drawing a line down middle of page. On top left side of page write a heading of “Income” and on top right side of page write a heading of “Expenses”.

So you're thinking of getting into a bigger house. You call up real estate agent and make an appointment to go see what market has to offer. Then you find it, perfect "move-up" home. It's everything you've ever wanted in a home unless your married, in which case it's everything your wife has ever wanted in a home.

You'd make an offer right then and there but realize you need to sell your old home before you can by this one. You haven't even put your old house on market yet. What to do?

The real estate agent advises that you could make what's called a "contingent offer"; buying new house is 'contingent' on you selling old one.

"Oops", says agent, "Your old home isn't even listed yet? You may have wanted to do that before we went house hunting. Your offer is a little too 'contingent' for most sellers…they probably won't take it."

But before you give up all hope of getting into home you want, first consider a bridge loan.

A bridge loan is a form of second trust that is collateralized by your present home in a manner that allows proceeds to be used for closing on a new house before old house is sold.

A bridge loan "bridges" gap between two transactions and is often difference between getting house of your dreams and missing out entirely. Bridge loans can also be setup to completely pay off old mortgage or to add new mortgage to your current debt.

Usually people who take out a bridge loan will use funds to pay off old mortgage while putting rest towards new home's down payment, first deducting any closing costs and prepaid interest.

Typically, loan is structured with a relatively short term, usually six months to a year, and hefty prepaid interest.