Aug
19

Chance to Protect Your Chicago Property’s Price

August 19, 2012

With the rising amount of foreclosures in the Chicago real estate market, homes are losing value alongside their neighborhoods. Can you imagine having insurance for that?

Apparently, it exists. Well, sort of. Colorado-based EquityLock Solutions, Inc. offers a program that protects the value of the borrower’s home from future local market fluctuations for two to 15 years, and it allows homeowners to file a claim to recoup up to 20 percent of their original protected amount when they sell.

protect your chicago property's priceBut it’s not considered insurance, says EquityLock, it’s a financial agreement that pays the homeowner upon resale if the local market index drops, whether that home sells for a loss or a profit, and it’s a concept that can be traced back to the mid-1970s when Chicago’s Lincoln Park implemented a type of home-equity protection.

This is how it works. At the time of contract, the Federal Housing Finance Agency’s local House Price Index (HPI) is used to determine market movement for future claim payments. After two years, covered homeowners who sell their properties are eligible to receive a payout if their neighborhood’s HPI has gone down, whether they sell that home for a gain or a loss.

One company that is now offering this protection plan is 1st Advantage Mortgage, a Draper and Kramer company with offices throughout Illinois.

“Home finance experts are excited about this product and the stability it brings to the housing market,” said Paul Lueken, President of 1st Advantage Mortgage. “Homeowners and potential homeowners have lingering fears about the market and we want to do something to help ease that fear.

“Too many qualified applicants are choosing to rent when they can buy. We see 1st Advantage Value Guardâ„¢ as a way of bringing back confidence in homeownership in Illinois and get people buying again.”

Some things to know about the plan:

*There is a one-time fee. The national average is about 2.05 percent, so for a home valued at $200,000 home, that cost would be about $4,100. There are financing options of up to 60 months for that fee.

*The contract expires after 15 years, so this is not the plan for the homeowner who has no plans to move over the next two decades.

*The policy can be set up to be transferable between homeowners, which could be a great selling point to a home buyer.

So is it worth it? To see an example of how it works, click here or visit equitylocksolutions.com for more information.

Categories: Economy, Insurance

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Tracey

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