A deposit bond is a written guarantee that substitutes the upfront 10% deposit traditionally required to purchase a property. Payment of the deposit is therefore able to be delayed until the date of settlement of the property.
Mortgage Navigators is able to arrange deposit bonds as an alternative to using cash, bank guarantees, or borrowed funds for your deposit on a residential or commercial property. We have access to all the major deposit bond underwriters in the Australian marketplace. A small one off premium (fee) is payable for the bond, and this effectively secures the property until settlement.
Benefits of a Deposit Bond
- Ensures the money that you would normally have used as an up-front cash deposit is left working for you in your current investments
- Saves the time and cost associated with arranging bank finance or a short-term loan
Why Use a Deposit Bond?
- If you are selling your home in order to buy another you may not have the 10% deposit available at exchange of contracts
- You may be waiting for funds to come through from another source
- If you buy a property off the plan, the settlement date may be more than a year away after exchange of contracts – your deposit need not be tied up for this length of time
- If you wish to buy at auction, deposit bonds can be issued prior to ensure you do not have to worry about organising your deposit quickly
- You may be aiming to borrow 100% of the purchase price for an investment property
Contact Mortgage Navigators today for more information about the finance solutions we can offer to meet your needs. We offer no obligation, free consultations.
