All Topics / Help Needed! / Deposit Bond

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  • Profile photo of fab_forumfab_forum
    Member
    @fab_forum
    Join Date: 2008
    Post Count: 5
    April 29, 2008 - 7:07 am

    Hi all,

    I've just decided to go ahead and put the deposit down on my first IP.  I'm living overseas at the moment, and I'm hoping to use a deposit bond.  Here's my first question:

    1.  Can you recommend a good place to get a Deposit Bond?  Bank/insurance company?  I feel a bit vulnerable just googling and hoping for the best.

    I have about almost 20% of the purchase price saved at the moment, but I haven't organised finance yet as I bought off the plan and it probably won't settle until early next year.  And here are some more questions:

    2.  Can you foresee any problems with getting finance when crunchtime comes? 
    3.  How long before settlement should you organise finance?

    My wife and I earn about 100k a year between us and will borrow 220k max on a 280k unit, but I just wonder if getting finance is difficult when you live overseas.  I was thinking about getting a pre-approval now, but it's all pretty new to me and would love some advice from those who have been there and done it.

    Any advice greatly appreciated.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    April 29, 2008 - 12:12 pm

    Hi FF

    Firstly welcome to the forum and I hope you enjoy your time with us.

    In answer to your questions:

    1) There are only a couple of companies that offer Deposit Bonds over a 12 month period. If you want to give us details on the Deposit amount and the term required I can work out the premium for you but it probably that cheap.
    2) One requirement of the Insurer will probably be that you have received conditional approval on your finance to ensure that you will be able to settle when it comes to it.
    3) All things being equal then finance should be a relative formality with the right lender however you probably need to be doing it now rather than later.

    I do many Expat loans and often find the hardest part is ensuring all of the documentation from the lender can be signed, witnessed and returned in time. So often clients omit to sign or obtain a document witnessed and it has to go back again.
    Many lenders require a reciprocal Bank in the Country you are living to ID you and sign off on the documents which depedning where you are can be tricky.

    More information would be required to advise you further.

    Richard Taylor | Australia's leading private lender

    Profile photo of fab_forumfab_forum
    Member
    @fab_forum
    Join Date: 2008
    Post Count: 5
    April 30, 2008 - 12:30 am

    Hi Richard,

    Thanks for the advice.  The deposit amount will be 10% of the loan, so $28,000.  The term could be anything from 7 – 15 months, depending on how long construction takes.  I've been told November at the earliest, but I'm assuming it'll be quite a lot longer.

    I think I'd better get the ball rolling re: loan approval.  I don't actually need to use a deposit bond, but would prefer to, as I'm getting good interest on the money at present. 

    Thanks again – I'll get cracking on that loan approval – hopefully it's not too painful!

    Cheers,

    FF

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    April 30, 2008 - 1:14 am

    FF

    Based on a Bond amount of $28000 and a term of 15 months max you are looking at a Fee of around $1338.00

    Let us now if we can help further.

    Richard Taylor | Australia's leading private lender

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