What is a +Plus mortgage?
A +Plus mortgage is a step above a basic mortgage - Protecting your down payment when you buy a home and protecting your equity when you refinance.
A +Plus Mortgage with down payment protection is the smartest way to buy a home because it saves you from selling at a loss if there is a real estate downturn. The market historically goes through 7-10 year cycles, with booms typically followed by price corrections. No one can time the market, but let's say you have to sell your home at a loss 2 years down the road or even 6, up to the full down payment amount you lose is reimbursed back to you. You will receive a check within 30 days - $20,000, $35,000, whatever the market loss amount is to make up to your original full down payment.
A +Plus Mortgage with Equity Protection operates the same way only instead of protecting your down payment, it protects the the increased home value you have accumulated by the time you refinance.
Don't I already get insurance when I buy?
The insurance you are required to buy at closing - Title Insurance, Homeowner's Insurance, Mortgage Insurance (PMI) - all protect the lenders. Nothing you buy in a standard mortgage protects you. You take money out of an F.D.I.C.-insured bank account and in return, you get keys to a house that may or may not go up or down in price.
+Plus is the only protection that safeguards your savings - the down payment or the equity you put into the home - at the closing table.
Do I need +Plus?
Remember, if you purchase a $300,000 home and put in a $30,000 down payment, if the market goes down only 5%, you don't lose 5% of your down payment, you stand to lose 5% of $300,000, which would be $15,000. That is HALF of the entire down payment you put in. But if you have +Plus, that $15,000 is reimbursed back to you in a check within 30 days. If you refinance, the same scenario can occur but instead of a down payment being at risk, it is your equity. Remember that your new appraised equity value when you refinance is your real, hard-earned savings and deserves to be protected.
As a point of reference, housing experts and economists predict the housing market typically corrects itself every 7-10 years. You can't time the market, but with +Plus, you won't have to. You get a check to reimburse your loss if you sell when the market happens to be down at the same time.
Most car owners do not get into car accidents but they still have auto insurance. So yes, you need it and it is worth it.
How do you measure if the market in my area has gone down?
It's simple, and it is objective and fair. Our federal government monitors local home prices with a price index called the FHFA (Federal Housing Finance Agency)
House Price Index
. We record the FHFA index for your state when you buy your home, and the index when you sell your home. If the FHFA House Price Index indicates home value has gone down when you sell, then we reimburse you for your loss up to the loss in the FHFA HPI, your full down payment or the actual resale loss whichever is less. Equity Protection operates the same way except we cover your appraised equity recorded when you refinance instead of a down payment.
So no, you cannot intentionally wreck your own home and blow a hole on the floor to claim your coverage. But we trust you are a nice person and would not do that anyway. By excluding a very small minority of people who may do that, we focus on protecting only honest hardworking homeowners such as yourself, and keep our coverage costs down for good people like you.
Do you offer +Plus coverage to home flippers?
No we don't. You cannot buy a home, try to flip it and expect to use +Plus coverage as your safety net. People who would do that would increase the coverage costs for everyone else who are just trying to find a home to live in.
But if you took a shot a buying a home at a great price and it just didn't work out for you, as long as you lived in it and it was considered your primary residence, you are covered.
Do you cover rental homes or homes purchased by investors?
No, this coverage is designed to protect everyday homeowners who live in the home as a primary residence. As in the case for home flippers, we exclude investors or rental homes, which are typically higher-risk properties, in order to keep overall coverage costs down for most homeowners.
Before +Plus came along, everyday honest homeowners were fully exposed and did not have any coverage if they lost their down payment in a market downturn. This coverage is a simple, straightforward coverage designed for them, not for those trying to mine for profits.
How long is the coverage?
7 years. Research shows homeowners typically suffer from home value loss when the market fluctuates in the short term after they buy the home, in the first 7 years.
You may have heard of the "7 year rule"; the recommendation by housing and personal finance experts that if you plan to own a home for more than 7 years, you likely won't incur a market loss because you will have enough time to ride out market ups and downs. But, 2 out of 3 first-time homeowners plan to live in the next home they buy for only up to 6 years, and many more who plan to live in their next home for 7 years end up selling earlier anyway for a variety of professional or personal reasons. So, we think given the low cost of this coverage, homebuyers are smart to cover all their odds to get +Plus mortgage.
Can I renew it after 7 years?
Not yet, but we are definitely looking to add renewal options in the near future.
If I sell my house at a loss in the allotted timeframe and get another house, can I get DPP on the new house?
Yes. Making a coverage claim on one home does not preempt you from enjoying down payment protection benefits on your next home. You will still be eligible.
What happens to the coverage if I refinance the house within the 7 years?
The +Plus down payment protection policy is yours. So, even if you refinance, your policy stays in effect for the full 7 years.
Also, if you did not have +Plus coverage on your original purchase, you could now look to get a +Plus Mortgage with Equity Protection and be protected.
This sounds too good to be true. What is the catch?
There is no catch. If there is a market downturn and you sell your home for less than what you paid for, up to the full original down payment (or the appraised equity amount you put in) is reimbursed back to you.
What's too good to be true is actually what has been happening on the other side. Homebuyers like you pay for title insurance, homeowner's insurance and private mortgage insurance to protect the lender's investment in your mortgage. If the home sells at a loss, the lender or the bank gets back their investment and the loss is 100% shouldered by the borrower. In a +Plus Mortgage, the money you put in will now also be covered.
Are there any exemptions?
No flippers or investors. +Plus only covers residential homes occupied by the homebuyer (includes single-family homes, condos and townhomes but no co-ops). This means investment homes and rental properties are not covered. But if you are like most homebuyers and you are buying this home to live in it yourself, then you have nothing to worry about and you will be covered.
When can I make a claim if I sell at a loss?
For a +Plus Mortgage with Down Payment Protection, buyers can make a coverage claim anytime between the beginning of the 25th month and the end of the 84th month of your policy. The reason policy holders cannot make a claim during the first two years is to preempt flippers. By excluding these high-risk investors who do not live in the home they buy, we keep the cost of coverage affordable for real homebuyers and homeowners such as yourself who shouldn't be penalized and have to pay more to cover others' high risks.
For a +Plus Mortgage with Equity Protection, owners who refinance can make a claim after a 1-year exclusion period up to 7 years. For the same reasons listed above, we include a short exclusion period to avoid any gamers and keep costs down for the vast majority.
Is there a limit to how much of my down payment or equity I can cover?
Yes, for a new home purchase, we cover up to a 20% down payment with a maximum of $200,000.
For a refinance, we cover the difference between the appraised value and the loan balance up to 20% of the purchase price or $200,000, whichever is less.
Do you need to inspect the home?
No, we don't need to inspect the home before or after your coverage begins, and we don't inspect your home when you file your claim if you sell at a loss after the market goes down. We determine market value changes based on the U.S. Government's
FHFA House Price Index
. This quarterly index records sales prices to determine how much a market has gone up or down. We use this along with your down payment amount and your actual loss from sale to calculate your claim request.
How do I decide if I want a +Plus Mortgage or a basic mortgage?
Ask yourself: Do I want to try to predict this market or would I rather just sleep easy at night?
Who is behind +Plus? Who pays the coverage of a +Plus Mortgage?
+Plus Down Payment Protection and Equity Protection is offered by ValueInsured, and backed by Everest RE, one of the world's largest re-insurance companies, with over $8 billion in capital. The Everest RE Group companies are rated A+ (excellent) by A.M. Best Company.
Do you have more details on how the policy works?
Sure thing! You may view a complete set of policy details and disclosures
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