Deposit bond makes good financial sense for Cronulla couple
When Steve and Samantha wanted to invest in a new waterfront home, they knew that using a deposit bond made good financial sense.
Business owner Steve was looking to buy a new waterfront home not far from where he and his wife currently live in the idyllic beach town of Cronulla, NSW.
They found a property in the perfect waterside location for their boating lifestyle, and despite it needing a lot of work, made an offer. However, the deposit was in excess of $150,000 with a settlement period over six months.
“I simply did the maths and worked out that, by putting the cash on our mortgage rather than using it for a deposit, over six months we would save around $5000 on interest. And that takes into account the deposit bond fee,” explains Steve. “It just made sense.”
This was the second time Steve had used a deposit bond; the first was over 20 years ago when the couple moved from England.
“We didn’t have the cash in Australia so we needed a deposit bond to go to auction,” Steve recalls. “Back then we used a mortgage broker to get the bond, which was for about $30,000.”
This time, the value of the deposit was much higher. Steve spoke to his insurance broker to find out if they could recommend a deposit bond provider, and they gave the names of two companies.
“We got in touch with both and Etienne from Deposit Assure came straight back to us to get more information and offer help,” says Steve. “They made it so simple and transparent, helping us fill out the forms pre-approval and taking the time to talk everything through.”
As savvy business owners, the couple had the required information to hand, understanding that it’s all about proving they have the equity and assets should anything go wrong.
Steve and Samantha were fortunate in that the vendor was a real estate agent who knew all about deposit bonds. But, as Steve says, that shouldn’t stop people from looking at deposit bonds as an option.
“Some people see deposit bonds as an expense rather than an asset. But at the end of the day, they are a tool,” he says. “The way I see it, the bond is equal to cash but you’re not taking it out of your own account. That way, you can use your cash for other things.”
And for anyone unsure of how deposit bonds work?
“That’s what sets Deposit Assure apart from the rest. They are there to hold your hand through the experience. Maybe not everyone needs that, but it certainly helps,” Steve says.
“If I move again and ever need a deposit bond, I’ll be knocking on their door!”
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