The Home Buyer's Korner

Information presented should be used for educational purposes only.

January 18th, 2012

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Job-Loss Protection Insurance

 Highlights

  1. Unemployment today is at its highest in 25 years.
  2. Buyers of lower priced homes get peace of mind from the coverage.
  3. Caveat: Payment made for you may be considered taxable income.
  4. Job-loss mortgage insurance — which pays all or part of your mortgage payment if you lose your job — can bring peace of mind to homeowners and would-be homebuyers alike.

And it’s often available at no cost to the homebuyer.

With the unemployment rate hovering around 10 percent — the highest in more than 25 years — it’s not surprising people are hesitant to buy a home, even in a low-rate, low-priced market. And countless current homeowners no doubt lose sleep worrying how to keep a roof over their heads if they join the ranks of the unemployed.

Once hard to find, job-loss mortgage insurance is now available not only from traditional insurers but from new-home builders, banks and other lenders, real estate agents, realty groups, and state and local housing agencies as well.

“The only reason people may not be buying (homes) now is fear of losing their jobs,” says Andrew Peters, chief executive officer of First Guaranty Mortgage Corporation, whose mortgage customers get the Worry-Free Mortgage Protection program free. In his experience, mortgage protection plans have become increasingly common in the past year or so. 

                                               Policies vary

As with any insurance product, policies vary. For example:

The California Association of Realtors’, or CARs’, Mortgage Protection Program is free for first-time homebuyers, who can get up to $1,500 per month for six months to help make their mortgage payments. The CARs’ Housing Affordability Fund has committed $1 million to the program.

Genworth Financial’s Job Loss Protection is available at no charge to buyers purchasing Genworth mortgage insurance. It covers PITI (principal, interest, taxes and insurance) for up to a certain amount, also up to six months.

First Guaranty Mortgage Corporation Mortgage Protection Program is funded by the seller at closing for $500. One of many throughout the country affiliated with The Rainy Day Foundation’s Homeowner Education and Loan Protection service, the program covers the lesser of the PITI or $1,800 per month, up to a maximum of six payments during the 24-month coverage term.

“Job loss protection plans in real estate are gaining in momentum,” says Andrew Peters, CEO of First Guaranty Mortgage Corporation, which began offering the program this year. “It’s a bit early to quantify at this point, but in today’s job market home buyers have shown a positive response to the concept. Andrew says it can differentiate a house from similar ones in the same market, especially in a market in which the greatest activity is in homes that have a lower price. Buyers of these homes — often first-time home buyers — tend to gravitate toward the peace of mind offered by these plans the most, he adds.

Many Realtors offer additional benefits to their home buyers such as A Homeowners Warranty, be sure to ask when calling any one of the Agents on our fb Home Buyer’s Educational Page.

HOME OWNERSHIP TOOLS

FHA 203K

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FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

You Mortgage Loan Officer, Real Estate Agents & General Contractors

are ready to assist you with your home purchase


 

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Your Mortgage Loan Officer, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

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