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You've always been dreaming of buying a house. You already actually have a house that you have your eyes on. The only thing that is stopping you from securing that house is that you can't provide the money that you need to pay for its initial deposit. If you're one of those people who are having problems in buying properties because of initial deposits, you should continue reading this article. You want to know why? This is because this article will discuss about deposit bonds.
What Are Deposit Bonds?
Deposit bonds are insurance policies that take the place of initial deposits. Deposit bonds are useful in situations where you can't produce immediately the money needed in making the initial deposit. So what happens if you still can't give the money needed in the transaction? In the event that you can't pay the vendor as agreed, the insurance company will be the one who's going to shoulder the initial deposit.
Benefits Of Deposit Bonds
Deposit bonds are a real blessing to those who are buying properties. Just imagine you can already acquire a property even if you don't have the money yet to buy for it! Just to give you examples of the advantages of deposit bonds, given below are some of the benefits of deposit bonds:
1. Allows you to secure a property without giving money for initial deposit - One of the benefits of using deposit bonds is enabling you to acquire a property without giving money for initial deposit. This is especially useful if you want to ensure that no one else would get the property that you've been eyeing.
2. Allows you to purchase off-the-plan properties - If, for some reason, you suddenly need to purchase a property, you may use a deposit bond in place of an initial deposit. Because of this, you need not worry about producing a large amount of money at that moment.
Kinds Of Deposit Bonds
Yes, you're read that right. There is more than one kind of deposit bonds available. To help you learn more about deposit bonds, given below are the kinds of deposit bonds:
1. Deposit bond that needs loan approval - This is a kind of deposit bond attached to the approval process of your lender. It only requires you to submit a few documentations and it is the least expensive kind of deposit bond.
2. Deposit bond that doesn't need loan approval - This is a kind of deposit bond that is not attached to the approval process of your lender. It requires a lot of documentations to process compared to the first kind of bond. With the number of documentations involve in processing the documentations being asked of, this kind of deposit bond is more expensive that the first kind of bond.
3. "Low docs" deposit bond - The "low docs" deposit bond is a kind of deposit bond that has a few requirements. The documentations needed in the "low docs" deposit bond include your identity, the Particulars of Sale page from the purchase contract, and repayment history.