Deposit bonds: The key to buying an off-the-plan home without the full 10% deposit
Dreaming of buying an off-the-plan home but don't have the full 10% deposit upfront? Don't worry, you're not alone! A deposit bond can help you secure your dream home without having to come up with the full deposit.
A deposit bond is a type of insurance that guarantees the builder that you will complete the purchase of the property. It's a great option for first-home buyers, investors, and anyone who doesn't have the full deposit upfront.
How do deposit bonds work?
When you use a deposit bond, you pay a premium to the insurer. In return, the insurer guarantees to pay the builder the deposit amount if you are unable to complete the purchase of the property.
Benefits of using a deposit bond
There are many benefits to using a deposit bond to buy an off-the-plan home:
You can secure your dream home without having to come up with the full deposit upfront.
You can keep your savings invested and earning interest until settlement.
You have more time to save up for your mortgage.
You can avoid paying bridging finance.
How to apply for a deposit bond
To apply for a deposit bond, you will need to contact a finance broker. You will need to provide them with information about your financial situation and the property you are purchasing.
The finance broker will assess your application and determine whether you are eligible for a deposit bond. If you are approved, you will need to pay a premium to the insurer.
Tips for buying an off-the-plan home with a deposit bond
Here are a few tips for buying an off-the-plan home with a deposit bond:
Compare deposit bond providers to get the best deal.
Make sure you understand the terms and conditions of the deposit bond before you sign anything.
Allow enough time to apply for and get approval for a deposit bond.
Make sure you have a backup plan in case you are unable to complete the purchase of the property.
Deposit bonds can be a great way to buy an off-the-plan home without having to come up with the full deposit upfront. If you're dreaming of buying an off-the-plan home, be sure to consider using a deposit bond to make your dream a reality.
