Deposit Bonds Your Deposit Alternative

What are Deposit bonds?

Deposit Bonds: "What are deposit bonds?" you may ask.
Deposit bonds are financial derivatives, in the form of a bond or
guarantee, that allows a buyer to meet a deposit requirement
on the purchase of a property, without actually having the cash
available at that time.

It is a substitute for cash in a form that is acceptable to the
vendor or vendor's agent. The actual deposit still has to be paid,
but this occurs at settlement when the rest of the purchase
price is paid.

So why haven't most of us heard about deposit bonds before?
Deposit bonds have been available in Sydney for about
10 years now. In fact a fifth of all mortgage settlements in
Sydney now involve deposit bonds.
They are now being used in most other states,particulary in the purchase 'off the plan' along with getting a pre-approval on a home Loan that's all you need to buy and control a $500,000 Investment Property.They can be used at an sale by Auction.

The Benefits
Deposit Bonds give you the power of cash without having it,allowing you to take advantage of buying opportunities.

It generally costs less than other options.
It carries no interest penalty. Generally a once of payment.

You can have one from 6 months up to 48 months.

It offers the convenience of being able to put a deposit down
whilst your money is working hard for you in a term deposit or
shares for instance even in your existing home when
purchasing your next home.

Where and When are Deposit Bonds Used?

At Auctions:Auctioneers may want 10% deposit at the fall of the hammer, in either cash or bank cheque. A deposit bond is accepted as cash, and you can fill in the amount and seller and property details, at the time of signing the purchase contract.

Buying your first home: First home buyers need to get the cash together to meet the deposit requirements of the lender.
However if that cash is saved in a term deposit when your
dream home comes up how will you pay the deposit?

Why not get a deposit bond instead? In the meantime your cash is working hard for you, earning interest or dividend!

Buying your 2nd or 3rd home: Why not buy your next
home using deposit bond instead of using bridging finance,
or waiting till the settlement completes on the other home?
Buying an Investment property.

If you own your home and you want to buy an
investment property, and want to borrow 100%
of the purchase price, a deposit bond can be use
as your deposit, allowing you to buy the property
with very little cash out of your own pocket.
How much are Deposit bonds?
Purchasing a property for $350'000 and using a
Deposit Bond as the 10% deposit ( $35,000 ) can
cost you around $420.

But once the bond is used for over a 6 month
period it begins to get dearer.

That will normally be less than other methods
of financing the deposit, plus you have the sheer
financing the deposit, plus you have the sheer
convenience to take advantage of a special property
that may become available tomorrow.

With deposit bonds you don't pay interest for the use
of the bond, yet you can earn interest on your
undisturbed savings!

For more information about the benefits of
Deposit Bonds please fill out the short, information
request form.