The basic idea is straightforward. For an upfront premium that under some circumstances could be part of the interest rate you pay on your mortgage, your down payment — all the way up to $200,000 — would be insured, with you as the beneficiary. If the value of your house declines and you sell at a loss, you’d be eligible to make a claim for up to the full amount of your original down payment.
The premiums are expected to average around $1,200 on a $20,000, 10 percent down payment on a $200,000 house. If you purchase the coverage as part of a lender credit toward closing expenses, rather than paying cash for the coverage at closing, the +Plus premium could be rolled into the interest rate on the entire loan, raising the rate slightly. It could also be a supplement to lender-paid mortgage insurance, with a higher rate on your mortgage.
Sounds intriguing, right? But as with all insurance products, you’ve got to look hard at the details, especially the terms governing when and how much you’ll receive if you make a claim for a loss. The sponsor of the plan is a company in Dallas, ValueInsured. For the +Plus program, ValueInsured is partnering with Texas-based specialty insurer Houston International Insurance Group, and Everest Re Group Ltd., a reinsurance company headquartered in Bermuda.
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