Long
Term Deposit Bonds - How Can They Help You?
by Phil Metcalfe
A
deposit bond is a form of guarantee for the deposit
to be paid at settlement. It gives the vendor security
that can be converted to cash if the purchaser does
not proceed with settlement of the property. The
purchaser indemnifies the guarantor by way of remuneration
in the application form; this provides a legal right
to recover the amount of the bond from the purchaser
in the event of default under the contract.
Many
people are aware of the benefits associated with deposit
bonds being able to assist with property purchases.
However,
you may not be aware that deposit bonds can also cater
for settlement periods of up to 4 years, making them
ideal for off-the-plan purchases.
This
is a growing market with large-scale developments
occurring in most capital cities across Australia.
The long-term bond ideally complements this process
for the following reasons:
·
It is an inexpensive way to secure a property over
long periods.
· The use of deposit bonds avoids the need
to tie up existing equity as the bonds are issued
on an unsecured basis.
· There are possible taxation advantages where
investment properties are concerned.
· Deposit bonds are available to both permanent
Australian and New Zealand residents.
If
you are interested in finding out more about deposit
bonds you may care to contact Phil Metcalfe from Deposit
Underwriters (exclusive QBE Insurance agent) on 02)
9929 9969 or 0416 247 577.
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