All about... Deposit Bonds - Guarantees
A deposit bond is a guarantee. It acts as a substitute for the cash deposit between signing a contract and settlement of the property. All About Home Loans can acquire a Deposit Bond on your behalf.
A deposit bond can be issued for all or part of the deposit required, up to 10% of the purchase price. Acceptance of the bond, in lieu of a cash deposit, is at the sole discretion of the seller.
At settlement the buyer must pay the full purchase price of the property, including the deposit. The use of a deposit bond does not remove the buyer's obligation to pay the full deposit upon settlement.
Deposit bond products are available for periods of one to four years. Some providers only deal in short term bonds of up to six months, whereas others only provide longer term bonds.
Should the buyer default under the contract of sale/offer and acceptance, the seller can claim the amount guaranteed by the Deposit Bond provider. The provider will then seek to recover this amount from the buyer.
The Deposit Bond provider charges a fee for approving the bond application and supplying it to the buyer's solicitor. The fee varies from provider to provider.
We can arrange a Bond within hours of receiving the lender's approval.
