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As a repeat home buyer we often face this situation. Our existing home has been sold but we got to move before our closing date.

So, the situation looks like - our money is stuck in our existing home and we need to move into our new home before we close our existing home. The situation is bit tricky.

The most common solution to this is to get a Bridge Financing. As the name suggests - it bridges the gap between two closing dates.

There are mainly two types of Bridge Loans - 1) Closed - with a fixed  payoff date and 2) Open - where the exact payoff date is uncertain. Both has their own risks associated with them and may cost you differently.

The main points to note are -

1. Lawyer fee is usually more than regular loans.
2. You have to produce more papers to the lender.
3. There may be a setup fee involved.
4. Interest rates are higher.
5. Interest rates may be payable upfront.
6. Needs a collateral.
7. Anticipated fund may get into trouble.

You should also look at other options like obtaining a Secured line of credit, before you opt for a bridge financing.