Deposit Bonds
A deposit bond, sometimes referred to as a deposit guarantee, is an insurance policy that acts as a guarantee to the vendor that the purchaser will pay the deposit at settlement.
These are often used in off-the-plan investment. A finance Broker or a bank can arrange these for you.
A Deposit Bond allows you to purchase a home or invest in property without having to provide the deposit in cash. A Bond is a substitute for the cash deposit required when purchasing a residential property – you simply pay the full purchase price at settlement. Both short and long term guarantees are offered to suit any settlement terms.
It should be noted that applicants need substantial equity – usually around FIVE TIMES the value of the bond. A bond is no easier to acquire than a loan to pay a deposit …. and basically the applicant has to supply very similar complying documents to the Broker to apply for the Bond as they would a loan application.
