What's a Deposit Bond? 💰
A deposit bond is a certificate from an insurer that replaces cash you'd typically hand over when you exchange contracts or win at an auction.
Instead of paying the 5% or 10% in cash upfront, you pay a one-off, non-refundable fee to an insurer.
The remainder of the property price, including the deposit, is due at settlement, when it's generally covered by your bank via the new loan.
They're quite useful when cash is tied up in another property, or buying with a long settlement. Or you might need it for an auction after you're pre-approved.
Important to remember - worst case scenario!
If you exchange on a contract to buy a home and then pull out, the bond provider has to actually pay the deposit in cash to the seller. Then, they'll come after you to that money back. So it's a smart tool, that comes with a very important caveat!
In saying that, that worst case scenario doesn't happen very often! Best to talk to your amazing Truly Finance Broker first.
Truly's advice, financial services and property strategies are complimentary. We do this for the best interests of our clients and we relentlessly strive to serve as the best mortgage brokers in Australia with uncommon excellence!
James Brett. Principal Mortgage Broker ☎️ 0439 591 759
Victor Simone. Principal Mortgage Broker ☎️ 0449 659 029
Nermalee Bowe. Senior Mortgage Broker ☎️ 0431 274 554
Dragan Disljenkovic. BD & Relationship Manager ☎️ 0422 435 900
Credit Representative Numbers 521733, 550284 & 547037 are authorised under Australian Credit Licence 389328
