According to Florida Realtors, there is now a type of downpayment insurance that homebuyers can purchase to protect their downpayment if real estate values decline. Amalgamated Bank which operates in Florida is the first bank to offer it. It is offered through a plan called ValueInsured. More Florida banks are expected to follow.
Many Florida homeowners experienced home values drop greatly around 2008 during the Great Recession. An incident like that can make buyers nervous in the future. This downpayment insurance should help ease their nerves going forward.
According to the ValueInsured website, the plan protects up to the full amount of the homebuyer’s initial down payment, in the event of a loss when they sell in a down market.
“We are committed to restoring home purchasing confidence by providing simple, affordable solutions that protect home buyers against unpredictable, negative market changes,” they wrote on their website.
An Amalgamated Bank announcement said that this is the first time the bank is offering insurance like this. It covers downpayment costs up to 5 percent of the total home cost.
“Working people shouldn’t have to worry about losing the financial control and flexibility that comes with renting when they make the decision to buy,” says Keith Mestrich, president and CEO of Amalgamated Bank. “If they need to sell their home, they may be able to do that even if their local housing values are lower than when they purchased. That’s why we’re working with ValueInsured.”
In the future, Florida will probably see more banks offer this type of downpayment insurance. If you were affected by real estate decline during the recession, or you just want more security in the purchase of your home, this could be right for you.
Our RE/MAX Paradise agents are happy to answer questions you may have about financing a home purchase in Miami!