Deposit Bond

Cash Free Deposit Guarantees

Whether you don’t have access to all of your deposit money, you’d prefer to keep earning interest on your deposit in a term deposit savings account, or you simply prefer not to use cash for your home deposit then a deposit bond is a great solution for you as long as you can demonstrate that you’ll have the funds available upon settlement.

Illawarra Home Loans will take care of all the details of both your home loan and deposit bond to ensure you have a smooth and easy transaction.

What Is A Deposit Bond?

A deposit bond is an alternative to a cash deposit and is often used when funds are not readily available (but will be available for settlement).

The deposit bond is basically an insurance policy that the insurance company will cover the 10% deposit if for whatever reason the deposit is to be forfeited to the vendor (seller). It is a guarantee that the deposit will be paid to the vendor. Upon settlement the full purchase price of the property is exchanged.

Who Can Use A Deposit Bond?

There are many scenarios where a deposit bond can be used and they are certainly not limited to First Home Buyers. The most common scenarios are:

  • First Home Buyers who don’t have the cash available straight away (you must be able to demonstrate that you will have the funds at settlement)
  • When purchasing at auction
  • Purchasers waiting for funds from the sale of existing property
  • When funds are locked in a term deposit, keeping the funds in the account will keep you earning high interest
  • When purchasing off the plan
  • When building your home to keep cash in your hands until settlement
  • Your scenario not listed? There are many more situations catered for, simply contact us for a chat

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What Types Of Deposit Bond Are Available?

We have both short term deposit bonds and long term deposit bonds available to you. The type of product you use will depend on the length of time before settlement.

Short Term Deposit Bond

Short Term Guarantees are available for property purchases with a short settlement period of up to 6 months.

Long Term Deposit Bond

Long Term Guarantees are available for purchases with a longer settlement period between 6 and 48 months which suits situations such as:

  • Building your home
  • Buying off the plan
  • When you have arranged for a longer settlement with the vendor

You must own existing residential property with sufficient equity to be eligible for this product so it is not suitable for First Home Buyers.

Will You Refund The Deposit Bond If Unused?

If the original Deposit Bond is returned unused within 30 days of issue, the fee, less an administration fee of $150.00, will be refunded.

This is a great option for purchasing at auction as you may need to bid on a few different properties and are not guaranteed to be the winning bidder.

Request a Call Back

Complete our short call back request form, select a time and day that suits you and a qualified home loan consultant will contact you to discuss your options.

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