Deposit bonds

Viewing 6 posts - 1 through 6 (of 6 total)

Eccles
Member
@eccles
Join Date: 2003
Post Count: 69
October 6, 2003 - 8:51 am
Now this may seem dopey but….
How the heck do you use a deposit bond from a bank to secure a property and how do you get one.
I read somewhere (do not know whether it was this site or not) someone spending $70 for a deposit bond to secure the property.
Help please
Bronwen
If the good die young then I will live forever
Billfromoz
Participant
@billfromoz
Join Date: 2003
Post Count: 381
October 6, 2003 - 9:16 am
G’day Bronwen…
A deposit bond is used in iieu of your cash. They are issued by Insurance Companies and St. George Bank also.
Ideal if you have funds tied up in shares etc.
You MUST have your finance approved prior to purchasing the Deposit Bond.
Depending on the amount of the bond (representing 10% of purchase price) cost is $100-$200. However if it’s an off the plan deal with lengthy settlement…will cost more..you pay for time as well.
At the end of the day you DO need to have that 10%…. so it’s only ideal as an interim measure.
Billfromoz
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
October 6, 2003 - 2:13 pm
There are companies that will lend to people that haven’t got their finance approved, but their applciations and assessment proceedures are just as strenuous.
Most banks issue them now. one company that I know of is deposit Power
http://www.depositpower.com.au/
Terryw
Discover Home Loans
North Sydney
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craigc
Participant
@craigc
Join Date: 2003
Post Count: 29
October 8, 2003 - 10:39 pm
Hi Eccles
I just used a deposit bond to purhase an IP. It was simple just talk to your bank. Mine cost $135.00 through the NAB. You will need to check with the vendor or thier legal beagle if they except a deposit bond as some vendors like to have an early release of part or all of the deposit. And do not be pressured by the agent not to use a deposit bond. they somtimes like to invest the depsit and make some % on the short tearm money market.
craigc
Eigentum
Member
@eigentum
Join Date: 2003
Post Count: 14
October 9, 2003 - 10:18 am
Just make sure you actually have the funds to cover all of the deposit in a bank account as you may otherwise find it hard to get a deposit bond. I was told by a not very friendly person that my idea of security wasn’t good enough and they wanted to see evidence of cash in the bank.
melbear
Member
@melbear
Join Date: 2003
Post Count: 2,429
October 12, 2003 - 10:20 am
Personally I wouldn’t want to release my cash early to the Vendor. If things go pear shaped, you now have to fight them to get your money back!!
My understanding of getting a deposit bond involves having 5 times the required bond in equity. Is this the case when you have loan approval as well, or just when you have not yet done that, ie for off the plan purchases with loooooong settlements?
Cheers
Mel