A Deposit Bond is a guarantee to the vendor (the seller of property) , by an insurance company or bank, that they will receive their 10% deposit, even if the purchaser defaults on the contract of sale. As a purchaser you are able to provide this guarantee to the vendor by paying a small premium to the insurance company.

Deposit bonds can be used in the following situations

·         Where their current home is sold, however the funds are not yet available for the deposit

·         Where the purchaser does not wish to pay the penalty for breaking a fixed investment or selling shares

·         Where the purchaser may want to attend more than one auction before they decide which home to purchase

·         Where the purchaser is an investor and the loan funds are not available until settlement

As a purchaser of property Deposit Bonds provide the following benefits:

·         It’s cost effective

·          Useful for asset rich/cash poor customers who wish to invest

·         in property and already own their own home

·         Purchasers don’t need to go to the expense and time delay of

·         arranging short term finance for the deposit

·          Convenient for home buyers who may have finance approval or assets tied up in other investments

·          Purchasers can keep their own savings earning interest right  up until the day of settlement

·         Convenient at auctions

To find out more about Deposit Bonds please contact What If We Finance today.