When you agreed to a property purchase, you are required to put a deposit between signing the contract of sale and settlement, to guarantee the commitment of a buyer to the contract of sale.
Buying and selling property at the same time can be tricky, especially when your funds are tied up.
A deposit bond is a substitute for the cash deposit used to guarantee the commitment of a buyer to the contract of sale.
A key advantage of deposit bonds is that there’s no need for cash upfront, which means property buyers can keep their cash until settlement occurs.
The bonds are underwritten by QBE Insurance, one of the most respected and recognised insurance companies in Australia. The process is relatively simple and quick, for a fee the bond provider can issue a bond so long as the buyer proves they will have the funds to complete their purchase at settlement,
Case Study
When Paul found her dream apartment Brisbane's inner west, he still needed to wait for the funds from his house sale in NSW, before she could secure his new property with a 5% cash deposit.
He found himself in a silent bidding war with another interested buyer, and when his offer finally accepted, he needed to find the deposit to secure the sale. The challenge was that the house sale in NSW hadn’t yet settled.
Paul then contacted MFC team to assist with finance application and remedy the issue,
MFC team proceed with a deposit bond application and a home loan application, The deposit bond is used as substitute for the cash deposit required between signing the contract of sale and settlement.
After going through the assessment and Paul's deposit bond application was approved and the deposit bond was issued, Paul then used to forward to the seller agent to then proceed and execute the purchase contract.
MFC team continued with the home loan application using the executed contract, and within 14 days a formal home loan approval was issued and settlement for the property purchase take place in 21 days.
Are you buying a property?
Get in touch with our team. We’ll assess your situation and if a deposit bond is what you need, we will take care of your application for you.