Overall, buyers who need to sell a home before buying a replacement home are better off in the long run by taking out a home equity loan instead of a bridge loan.

That’s because home equity loans are less expensive. The best way to get a home equity loan is to do it before a home goes on the market because most lenders won’t fund a home equity loan if a home is for sale or has been for sale recently.

However, there are circumstances when it makes sense for a buyer to make an offer to purchase contingent on selling a home. In that scenario, it’s wise to line up a bridge loan in case the seller issues a notice to perform. Because most sellers won’t take a home off the market for a contingent offer and will try to kick out the contingent buyer when a better offer rolls around. It can be a gamble for a buyer. The buyer might need the bridge loan and might not. Maybe the buyer’s home will sell quickly. Maybe it won’t.

At least a bridge loan provides some breathing room, even if it means owning two homes for a while. It’s sort of an ace-in-the-hole for some home buyers. . . . read more about abridge loan.

http://homebuying.about.com/b/2009/08/19/bridge-loans-make-it-easier-to-buy-before-selling.htm