Deposit bonds are often issued in two forms:

Short term bonds

–  For periods up to and less than 6 months.

–  Ideal for property purchases or auctions.

–  Can be issued on the spot in some cases or within 2 working days otherwise.

Long term bonds

–  For periods of 12 to 48 months and sometimes longer, depending on what the settlement terms are for your property.

–  Suited to ‘off the plan’ purchases or properties which are to be completed in the future.

Be sure to check the “Sunset Clause” on your contract when arranging a quote for a deposit bond. The builder or developer may suggest completion at a certain time but the contract to purchase has a clear “sunset clause”, which is the date the builder/developer must complete the property. In our many years of experience, we have seen expected completion dates and sunset clause dates differ by several years.

Deposit bonds are available to individuals, companies, trusts and Self-Managed Super Funds (SMSF). 

They can be used to:

– Buy existing property, investment property or first home.

– Buy vacant land.

– Buy and sell property at the same time.

– Buy off-the-plan or a house and land package.

– Invest in commercial property or buy new premises for your business.

– Buy with SMSFs, trusts or when waiting for a gift from family or a government grant.

Using a deposit bond is often easier and less expensive than using your cash savings or a bank guarantee and can be used as a means of security to a vendor that deposit will be paid on settlement.

Deposit bonds can be used to:

– Purchase property at a moment’s notice.

– Secure a property with minimal outlay and bridge the time gap between the purchase date and settlement.

– Avoid applying for expensive bridging finance.

– Let your money continue to work for you elsewhere until the last possible moment.

– Purchase property at auction without needing large cash reserves.

– Avoid having to apply for a temporary loan increase which can take several weeks.

When applying for a deposit bond you should keep in mind the following:-

– Deposit bonds are unsecured and, once issued, you will not be able to refund them.

– They are another form of credit. When you settle the full amount of your property, you will have to produce the balance of the purchase cost and the deposit that was covered by the bond.

– If you default when the bond expires, the bond underwriter will pursue you for the deposit amount and the cost of your investment.

– Consider taking out only one deposit bond at a time.

– Like any property investment, factor in the risks of your property depreciating, not selling or not attracting tenants.

Any purchaser of a property can apply for a deposit bond including: 

– Existing property owners wanting to purchase property,

– Investors wanting to grow their property portfolio,

– First time home buyers or

– Most commercial property purchasers.

If you’re not sure if you fit these categories, call Aspire Mortgage & Finance and if time permits, we will arrange to pre-qualify you for a deposit bond.

Simply ask us at Aspire Mortgage & Finance for an application form today.