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| Deposit Bonds
Future Financial deposit bond substitutes for a cash deposit between signing contracts and settlements.
Deposit bonds can be issued for all or part of the deposit amount required, up to 10% of the purchase price.
Products available include Short Term Guarantee for settlement terms up to 6 months or Long Term Guarantee for settlement terms between 6 and 48 months.
Quick & Easy
Most applications are processed within 24 hours.
The Deposit bond terminates on settlement of the property, when the contract is terminated, rescinded or the expiry date has passed, whichever occurs first. It also terminates when a claim is paid by Vero Insurance Limited.
Alternative to Short Term Finance
For many people, short term finance is costly and time consuming involving additional application fees, high interest rates and delays in processing. Deposit bonds can usually be arranged much quicker and for less cost than bridging finance loans.
Economical - one fee, no interest
The cost savings could be considerable. For example, the fee for a $30,000 Short Term Guarantee is $360. Short term finance may cost you $727 based on an application fee of $450 (often 1.5% of the borrowed amount), plus interest payable of $277 (assuming an 8% interest rate over six weeks).
By using a Deposit bond, you have saved $367.
Flexible for Auctions
Deposit bonds are ideal for auctions. A Deposit bond is issued prior to auction so that the purchaser can gain the vendor's acceptance of the Guarantee beforehand.
The property and vendor's particulars are left blank and the purchaser is authorised to complete these details if they are the successful bidders.
Guaranteed by Vero Insurance Limited
Our deposit bond is secure because payment is guaranteed by Vero Insurance Limited. The Guarantee cannot be cancelled where it has been relied upon to sign a contract.
Future Financial can simplify the process of buying and selling your property. In many cases, vendors accepting the use of a deposit guarantee or bond by purchasers will secure a sale quickly, particularly in situations where people are looking to buy and sell at the same time.
The process differs slightly depending on where you wish to purchase.
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Private Treaty (Non-Auction)
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Auction
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1. Determine property to be purchased and agree price with agent/vendor.
2. Ensure sufficient purchase funds will be available for contract completion (finance approved, existing funds to be available, definite sale of current property).
3. Apply for Deposit bond including copy of contract and other required information.
4. Deposit bond approval issued.
5. Sign contract including deposit guarantee details and any other conditions.
6. Deposit bond given to Stakeholder (Real Estate Agent/Solicitor) as deposit commitment.
7. Contracts exchanged (properties in Victoria only, not required for other States or Territories).
8. Settlement occurs with full purchase price being paid, including amount represented by the Deposit bond.
9. Property is now yours to Enjoy!
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1. Ensure sufficient purchase funds will be available for contract completion (finance approved, existing funds to be available, definite sale of current property).
2. Conduct any necessary checks prior to auction.
3. Ensure that auctioneer and vendor are prepared to accept a bond at least 2 days prior to auction.
4. Apply for Deposit bond including copy of contract and other required information.
5. Deposit bond approval issued.
6. Successfully bid at auction. (If not, Deposit bond is still valid for other auctions).
7. Sign contract including deposit guarantee details.
8. Deposit bond given to Stakeholder (Real Estate Agent/Solicitor) as deposit commitment.
9. Contracts exchanged.
10. Settlement occurs with full purchase price being paid, including amount represented by the Deposit bond.
11. Property is now yours to Enjoy!
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