Deposit Bonds
If you don't have the cash for a deposit to buy another property - then a deposit bond could be the answer.
What is a Deposit Bond?
The seller of property takes a 'deposit' so that they will not be left 'high and dry' if you cannot pay for the property. But raising a deposit - say $40,000 - might not be very easy, especially at short notice.
A deposit bond replaces a cash deposit injection, and is just as good as cash! It is used often for ‘off the plan’ purchases and at ‘auctions’. It can be a cheap alternative than accessing your equity, taking money from a term deposit or selling shares. It’s a one off premium that is paid and a bond is issued to the sellers representative and held until time of settlement. Image Financial Group can help you to apply for a deposit bond with minimum hassle.
types of Deposit Bonds
Through Image Financial Group, you can apply for 3 different kinds of deposit bond, all of which have different features and prices:
- 1. A bond issued on approval from a lender.
This deposit bond requires minimal documentation, as it 'piggy backs' on the lender's approval process. (Unconditional approval is generally required, though if you are buying at auction an approval subject to valuation only is usually acceptable.) These bonds have the lowest costs and have up to 12 months validity. - 2. A bond not requiring approval from a lender.
Because there is no lender's approval on which to piggy back, applying for this kind of bond is more involved and the paperwork involved is similar to that involved in applying for a loan. Because of the additional work in assessing the application, this type of bond is more expensive. Such bonds can be valid for up to 48 months. - 3. A "low docs" deposit bond.
This bond is secured on available equity in existing property of yours. You can self certify your income and require minimal documentation.
