Home Price Protection is a financial product – available exclusively through Guardian Settlement Agents – that allows home sellers and buyers, as well current owners, to protect the value of their property against the uncertainty of today’s housing market. It can provide a payoff at the time of sale to make up for potential losses in the value of the home.
When a homeowner, buyer or seller purchases a 15-year Home Price Protection contract, the terms are based on how much of the home’s value they plan to protect and the current value of the region’s House Price Index – as set monthly by the Federal Housing Finance Agency. Clients purchasing Home Price Protection through Guardian Settlement Agents pay a fixed cost of 1.75 percent of the value they plan to protect. Most customers use the home’s current market price when they purchase their contract, but any value up to $2 million can be protected.
The contract cannot be cashed in for the first two years of the term but if the house is sold in years three to 15, the House Price Index at the time of the sale is compared to the Index level when the contract was originally purchased. If the index has fallen, then the contract holder will receive a check in the amount of the value of the contract multiplied by the percentage change in the House Price Index.