Coverage period is 7 years. I imagine 84 months is max installment schedule, aka ~$12 / mo.
My question is whether it’s 1st dollar below purchase price, or after accrued equity is lost too (or some combination thereof). Since minimum time in the home is 2 years that’s 24 months of payments – part of which goes towards principal, bumping your equity as you go.
Using same example: $180k loan, 4% rate, 30 yr term…after 3 years you’ve got almost $10k principal paid off. If your home sells for $190k, are you eligible to file a $10k claim or is that considered lost equity instead of lost down pmt?
Note that both the price of your home and the FHFA index has to fall. There’s no hedge against overpaying for a home.
Also note that they didn’t pick the Case Shiller index, but FHFA which is much less volatile. While Case Shiller (10 city index) was down 40% at one point, FHFA (National) didn’t drop more than 22% (although certain regions did worse).
To do any business with this company they must provide strong financials. If home prices increase it is a money maker for them,
if they have a downward slide, the earned premiums will pay a very small portion of the claims. Unless, they are hedging of to other insurance companies. But full disclosure on this is a must
This is a great idea and I wish I had it when I had to re-locate for work. Would have been a relatively small investment for 5 years of coverage. So, you are effectively only paying about $200 per year and you can sock it into your mortgage so that the payment is only like $10-12 a month…a no brainer in my opinion
$1000 to insure a $20,000 down payment? Doesn’t sound like a wise purchase.
If that 1000 gets rolled in to the mortgage, like they say you can, then you pay for it for 30 years.
Coverage period is 7 years. I imagine 84 months is max installment schedule, aka ~$12 / mo.
My question is whether it’s 1st dollar below purchase price, or after accrued equity is lost too (or some combination thereof). Since minimum time in the home is 2 years that’s 24 months of payments – part of which goes towards principal, bumping your equity as you go.
Using same example: $180k loan, 4% rate, 30 yr term…after 3 years you’ve got almost $10k principal paid off. If your home sells for $190k, are you eligible to file a $10k claim or is that considered lost equity instead of lost down pmt?
The article cites between two to seven years selling the home at a loss.
Smells lke FGI.
Note that both the price of your home and the FHFA index has to fall. There’s no hedge against overpaying for a home.
Also note that they didn’t pick the Case Shiller index, but FHFA which is much less volatile. While Case Shiller (10 city index) was down 40% at one point, FHFA (National) didn’t drop more than 22% (although certain regions did worse).
To do any business with this company they must provide strong financials. If home prices increase it is a money maker for them,
if they have a downward slide, the earned premiums will pay a very small portion of the claims. Unless, they are hedging of to other insurance companies. But full disclosure on this is a must
This is a great idea and I wish I had it when I had to re-locate for work. Would have been a relatively small investment for 5 years of coverage. So, you are effectively only paying about $200 per year and you can sock it into your mortgage so that the payment is only like $10-12 a month…a no brainer in my opinion