Home trade in programs worth it?

**manatbay** · 02-25-2011, 04:29 PM

Hi, my family bought our house right when my wife and I got married 4 yrs ago and we have since had 2 children thus outgrowing our current abode. I'm wondering is a trade in program is in the cards for us, Have any of you had experience with one? There's a local program hosted by Condron homes in Spokane (Condron Homes LLC) that I was looking at, but I want to make sure it's the right move. Currently to get out of our house it will cost us 15-20k, the idea is the trade in company takes that amount and slaps it into the cost of the new house; not sure how the bank feels about this. Any ideas?

**Greg** · 02-26-2011, 04:49 AM

It sounds like they will apply the shortage of funds from the sale of your old house to your new house. Your new payment will be for the new house plus the balance from the old house.

The only way they can make it work is if the new lender is connected to the builder. Typically, these lenders do these types of deals because they can get a higher interest rate.

Before you sign anything check to see what the interest rate and loan costs are going to be. Have an attorney look over any paperwork before you sign and have them look for hidden costs.

If you borrow an extra $20,000 against the new house will the home owners insurance cover the total amount of the loan. They do this type of program with cars and I have known people who bought a new car with the balance of the old loan rolled into it. After the wreck they still owed the balance because the insurance only covered the value of the vehicle.

Proceed slowly and good luck.